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Management Presentation Project Scampi

December 2019

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This Management Presentation (the “MP”) is intended solely for the use of prospective respondents (the “Respondents“) in determining whether or not to pursue the Inv itation to Negotiate #127-19 for Strategic Alternatives (the “ITN”) by JEA (also referred to as the “Company”). This MP is of a proprietary and confidential nature, and is only being furnished to those Respondents who have agreed to be bound by the terms and conditions of the Non-Disclosure Agreement. Capitalized terms used but not otherwise defined herein shall have the respective meanings in the ITN.

By accepting this MP, the recipient agrees that it will, and it will cause its directors, officers, managers, employees and representatives to use this MP and all of the information contained herein only to evaluate a negotiated transaction with the Company and for no other purpose and shall return this MP, together with any copies, to the Designated Procurement Representatives upon request. This MP contains confidential material that is non-public information concerning the Company. Receipt of this MP constitutes your acknowledgment that you will maintain the information contained herein in strict confidence. By accepting this MP, the recipient acknowledges and agrees that the confidential nature of this MP and any potential transaction may be limited by Florida Public Records Laws.

This MP has been prepared for discussion purposes relating to the ITN only and is being delivered subject to the terms, and the prior execution, of a non-disclosure agreement (the “Non-Disclosure Agreement”) between you and the Company. Nothing herein is intended to in any way modify, amend, or supersede any of the terms and conditions set forth in the Non-Disclosure Agreement, which agreement remains in full force and effect in accordance with its terms. In the event of any conflict or inconsistency between the Non-Disclosure Agreement and this MP, the provisions of the Non-Disclosure Agreement shall, in all respects, govern and control. IF YOU HAVE NOT EXECUTED AND DELIVERED A NON-DISCLOSURE AGREEMENT, YOU HAVE RECEIVED THIS MP IN ERROR. IF SO, PLEASE NOTIFY US IMMEDIATELY BY TELEPHONE, AND RETURN THIS MP TO US.

This MP does not constitute nor does it form part of an offer to sell or the solicitation of an offer to buy any securities or assets of the Company, nor should this MP be construed to indicate that the business of the Company remains unchanged since the date of this MP.

Certain information contained herein is from public or other sources. The Company and the Designated Procurement Representatives have not independently verified any of such information. This MP includes certain statements, estimates, and projections provided by the Company with respect to its anticipated future performance. Such statements, estimates, and projections reflect various assumptions concerning anticipated results, which assumptions may or may not prove to be correct. Such projections and estimates are not necessarily indicative of current value or future performance, which may be significantly more or less favorable than as reflected herein.

Each of the Company, J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC (collectively, the “Advisors”) expressly disclaims any and all liability which may be based on the information contained herein, or any errors herein or omissions herefrom.

This MP does not purport to contain all of the information that may be required to evaluate such a transaction and any recipient hereof should conduct its own independent analysis of the Company and the data contained or referred to herein. In furnishing this MP, neither the Company nor its Advisors undertake any obligation to provide additional information or to correct or update any of the information set forth in this MP. Neither the Company nor its Advisors make any representation or warranty, expressed or implied, as to the accuracy or completeness of the information contained in this MP, or made available, orally or in writing, in connection with any further investigation of the Company, and nothing contained herein is, or shall be relied upon as, a promise or representation, whether as to the past or the future. The recipient should rely solely on the representations and warranties made to it by the Company in any executed definitive agreement.

As a public body politic and corporate, the Company is subject to Florida’s broad Public Record Laws as found in Article I. Section 24 of the Florida Constitution, and Chapters 119 and 286 of the Florida Statutes.

Recipients agree to comply with JEA’s Procurement Code and Florida’s public procurement laws, which, among other things, prohibit certain communications during the procurement process and any subsequent appeals period. For additional information regarding the procurement process and prohibited communications, please refer to Section 2 of the ITN, as modified and supplemented by Addendum 2 and Addendum 3.

Subject to the JEA Procurement Code and the terms of the ITN, the Company undertakes no obligation to provide the recipient with access to additional information and reserves the right, without advance notice, to negotiate with one or more Respondents, to change the procedures for any transaction, to terminate negotiations at any time prior to the signing of a definitive agreement for a transaction, to enter into such agreements with any other party, and to exercise any such other rights as are reserved in the ITN. Nothing herein is intended to in any way modify, amend, or supersede any of the terms and conditions set forth in the ITN.

The Advisors are acting as exclusive financial advisers to the Company in relation to the proposed transaction, will not regard any other person (whether a recipient of this MP or not) as a client in relation to the proposed transaction and will not be responsible to anyone other than the Company for providing the protections afforded to clients of the Advisors nor for providing advice to any such other person. Any person considering entering into the proposed transaction: (i) may not rely on this MP in determining any course of action in relation to the proposed transaction or otherwise; and (ii) must seek its own independent financial advice.

Inquiries should be directed only to the Designated Procurement Representatives. Under no circumstances should the Company or any of its employees, customers, lenders, or vendors be contacted directly. If you have any questions or need additional information, please contact the Designated Procurement Representatives.

2

Legal Disclaimer

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Organizational Chart | Senior Leadership Team

JEA Board of Directors (1)

Deryle Calhoun

VP/GM Water

Wastewater

Systems

Steve McInall

VP & Chief

Energy & Water

Planning

John McCarthy

VP & Chief

Supply Chain

Officer

Caren Anders

VP/GM Energy

Kerri Stewart

VP & Chief

Customer Officer

Jon Kendrick

VP & Chief

Human

Resources Officer

Ryan Wannemacher

Chief Financial Officer

Herschel Vinyard

Chief Administrative

Officer

Melissa Dykes

President and Chief

Operating Officer

Aaron Zahn

Managing Director & Chief Executive Officer

Ted Hobson

VP & Chief

Compliance

Officer

Lynne Rhode

Chief Legal

Officer

Paul Steinbrecher

VP & Chief

Environmental

Services Officer

Sherry Hall

VP & Chief

Government

Affairs

Best-in-Class management team with extensive utility experience

Technology

Services

Juli Crawford

Director Financial

Planning &

Analysis

Steve Bossier

Director Risk

Management

Services

Joseph Orfano

Treasurer

Russel Caffey

Finance Officer Chief Security

Officer (Open) Innovation &

Black Belt

3

Note: 1. Additional organizational detail may be found in Appendix 2 - Organizational Detail

Shawn Eads

VP & Chief Information

Officer

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Presenter / Title Experience

Aaron Zahn

Managing Director and

Chief Executive Officer

• Mr. Zahn oversees all operations for one of the largest public utilities in the nation, providing electric, water and

wastewater services to customers across a 900-mile service territory in Northeast Florida. Under his leadership, JEA

has, among other achievements, reached best ever JD Power customer satisfaction and service reliability scores,

expanded demand side customer programs, initiated an integrated water resource and ‘One Water’ plan,

expanded its solar portfolio by 250MW, paid off ~$700MM in debt and initiated restructuring of executive

leadership, operations and financial strategy to address market changes in core electric and water businesses

• Previously, Mr. Zahn was the Chairman & CEO of BCR Environmental Corporation, a private equity backed water

& wastewater public-private-partnership company, that he led from startup to $200MM in contracted backlog

• Prior to BCR, Mr. Zahn worked as a portfolio manager for two multi-strategy hedge funds overseeing $2Bn of

private credit, structured product, and equity investments

• Throughout his career, Mr. Zahn has acted as principle to $25Bn+ of mergers, acquisitions and financings, $6Bn+ in

structured product private placements, and $200MM+ in commercial real estate development

• Mr. Zahn is on the Board of Directors for the Jacksonville Chamber & YPO and has previously served on boards in

the telecommunications and higher education sectors

• Mr. Zahn is a graduate of Yale University

Melissa Dykes

President and Chief

Operating Officer

• Ms. Dykes leads the operation of the utility, responsible for providing reliable, affordable and safe utility services to

more than one million people across four counties

• Ms. Dykes served as JEA’s Chief Financial Officer for nearly six years prior to her current role

• Previously, Ms. Dykes served as CFO of a portfolio company of a large energy private equity firm and as a

principal in a renewable energy development company

• Ms. Dykes also served as Vice President in Investment Banking at JPMorgan, where she was responsible for

providing capital solutions for clients, including more than $26Bn in financings for municipal electric and water

systems

• Ms. Dykes is a graduate of the University of Florida and holds a certificate in Advanced Management from the

Tuck School of Business at Dartmouth

Ryan F. Wannemacher

Chief Financial Officer

• Mr. Wannemacher provides leadership to ensure fiscal responsibility for the long-term financial health of JEA,

resulting in access to capital at low cost for JEA’s customers

• Mr. Wannemacher is responsible for all aspects of JEA’s finances, including treasury, financial reporting, financial

planning, budgeting and analysis, insurance risk management, as well as corporate strategy

• Prior to being CFO, Mr. Wannemacher served as JEA’s Director in Financial Planning and Analysis

• Mr. Wannemacher previously served as Vice President in Investment Banking at JPMorgan, responsible for

providing capital solutions for clients, including over $20Bn in financings for many municipal electric, water and

natural gas systems

• Mr. Wannemacher holds a B.B.A. in Financial Consulting from Southern Methodist University

Today’s Presenters

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Herschel Vinyard

Chief Administrative

Officer

• Mr. Vinyard oversees corporate compliance, legal, environmental and government affairs, in addition to serving

as a strategic advisor to JEA’s senior leadership team

• Prior to joining JEA, Mr. Vinyard served as Of Counsel for Foley & Lardner LLP in both its Government Solutions and

Environmental Regulation Practices

• Mr. Vinyard previously served as Secretary of the Florida Department of Environmental Protection under Governor

Rick Scott from 2011-2014, where he was involved in all aspects of state-level environmental policy and

regulation

• Mr. Vinyard received his law degree and bachelor's degree from Louisiana State University

Lynne Rhode

Vice President & Chief

Legal Officer

• Ms. Rhode practiced transactional, regulatory and corporate law with Jacksonville-based law firm Driver,

McAfee, Hawthorne & Diebenow and environmental law with law firms Troutman Sanders LLP and Williams

Mullen

• Ms. Rhode served as Senior Assistant Attorney General and Section Chief of Environmental and Natural Resources

Division of the Virginia Attorney General’s Office

• Ms. Rhode holds a Bachelor of Arts in Economics from the University of North Carolina at Chapel Hill; a Juris

Doctor degree from the University of Virginia; and a Master of Science in Regulation from the London School of

Economics and Political Science

Kerri Stewart


Customer Officer

• Ms. Stewart joined JEA as Chief Customer Officer in 2017, bringing more than 14 years of experience to the

organization

• Previously, Ms. Stewart served as Chief of Staff for Jacksonville, Florida Mayor Lenny Curry, providing policy and

public affairs guidance to the mayor

• During her years of public service, Ms. Stewart also served as director of the city’s Housing and Neighborhoods

Department, created the Office of Operational Efficiency and served as a policy advisor to Mayor John Peyton

• Ms. Stewart graduated from the University of North Florida’s Coggin School of Business with a bachelor’s degree

in Business Administration, double-majoring in Marketing and Management. She also holds a certificate in

Business Analytics from Harvard University

Today’s Presenters (cont’d)

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Caren Anders

Vice President / General

Manager, Energy

• Ms. Anders has lead responsibility for producing and delivering energy to JEA's electric customers

• Ms. Anders is responsible for leading the planning, constructing, operating and maintaining of JEA’s electric

system, including generation plants and transmission, substation and distribution systems

• At both Duke and Exelon Corp., Ms. Anders led high-performing teams across the energy spectrum, including

Generation, Transmission, Distribution, Emerging Technologies and Shared Services

• Ms. Anders earned a bachelor’s degree in engineering from the University of Pennsylvania and a master’s degree

in finance from Drexel University and is a licensed Professional Engineer in the state of Pennsylvania

Deryle Calhoun

Vice President / General

Manager, Water /

Wastewater Systems

• Mr. Calhoun is responsible for leading the planning, constructing, operating and maintaining of JEA’s water &

wastewater system; delivering exceptional service to JEA customers across a four-county area

• Mr. Calhoun began his career in water and wastewater in 1993 with the City of Jacksonville Public Utilities as a

project engineer and joined JEA in 1997 when the City's water and wastewater services were transferred to JEA

• Mr. Calhoun holds a BS in Environmental Engineering from the University of Florida and is a registered Professional

Engineer in the State of Florida

John McCarthy


Supply Chain Officer

• Mr. McCarthy is responsible for leading JEA's logistics operations and support services groups. His responsibilities

include JEA's facilities, fleet, procurement, inventory management, investment recovery, emergency

management planning and recovery and utility locates groups

• Mr. McCarthy joined JEA in 2002 after a successful 20-year career as a U.S. Navy Supply Officer

• During his 18 years at JEA, Mr. McCarthy served in various leadership roles within the logistics groups, including an

initial assignment as a Procurement Project Coordinator where he developed an aggregated sourcing model

adopted by seven different utility companies

• Mr. McCarthy received his B.S. degree from the U.S. Naval Academy and an M.B.A. degree from The Ohio State

University


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Shawn Eads

Chief Information

Officer

• Mr. Eads oversees JEA’s enterprise-wide information systems and infrastructure, ensuring they meet current and

upcoming organizational goals while also positioning JEA as a digital innovator

• Prior to joining JEA, Mr. Eads worked at GE Appliances, where he served as Senior Director of IT Programs and

Business Development

• While at GE Appliances, Mr. Eads built a team responsible for cloud and user interfaces in home energy

management and Wi-Fi-connected appliances

• Mr. Eads earned a bachelor’s degree in chemical engineering from Rose-Hulman Institute of Technology in

Indiana and an MBA from Xavier University

Ted Hobson


Compliance Officer

• Mr. Hobson is responsible for development, implementation and maintenance of JEA's Compliance Programs

including NERC Electrical Standards, NERC Critical Infrastructure Protection standards, FACTA regulations and

other related federal and state regulations. Mr. Hobson is also responsible for JEA's Physical Security department,

as well as Audit Services and Enterprise Risk Management

• Mr. Hobson's previous position was Director of Energy Delivery, where he was responsible for all electric field

activities. Those activities included overhead and underground line work, system protection and controls,

substation maintenance and the 24-hour operation of the JEA power system

• Mr. Hobson holds a BSEE from the University of Florida and is a registered Professional Engineer in the State of

Florida

Jon Kendrick


Human Resources

Officer

• Mr. Kendrick is responsible for leading JEA’s Human Resources groups, which include Recruiting, Compensation,

Benefits, Payroll, Labor Relations, Leadership & Development, Safety and Health, Organizational Excellence and

HR Business Partners

• Mr. Kendrick has more than 25 years of human resources experience that spans the healthcare, financial services,

transportation and technology industries; including a previous tenure at JEA

• Mr. Kendrick most recently served as Human Resources Director for Yusen Logistics (Americas) Inc. in Jacksonville

• Mr. Kendrick holds a Bachelor of Arts in Economics from the University of Florida and a Master of Divinity from the

New Orleans Baptist Theological Seminary


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Paul Steinbrecher


Environmental Services

Officer

• Mr. Steinbrecher is responsible for leading JEA's Environmental Services group ensuring the highest levels of

environmental compliance and sustainability

• Prior to joining JEA, Mr. Steinbrecher was a process engineer, project and client manager with CH2M Hill focused

on advancing cost-effective environmental and engineering solutions for utilities, business and industry and

governments

• Mr. Steinbrecher serves as President of the Florida Water Environment Association Utility Council and as a national

board member of the WateReuse Association

• Mr. Steinbrecher holds BS and MS degrees in Civil Engineering from Valparaiso University and the University of

Arkansas, respectively

Steve McInall


of Energy and Water

Planning

• Mr. McInall is responsible for long-term planning for JEA’s energy and water sectors, overseeing the development

of a more than $1Bn capital program

• Previously, Mr. McInall served as the Director of the Electric Production Resource Planning Department

• Prior to joining JEA, Mr. McInall had a 27-year career at several regional and national engineering consulting

firms, including Stone & Webster Engineering Corporation, Boston and MACTEC Engineering and Consulting in

Tallahassee and Jacksonville

• Mr. McInall holds Bachelor's and Master's degrees in Nuclear Engineering from the Massachusetts Institute of

Technology and a Master of Public Policy degree from Jacksonville University


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Rules of the Road

• Through the remainder of the negotiation phase, JEA anticipates that it will follow the process

described in Sections 3.3.4-3.3.10 of the ITN. In doing so, JEA anticipates that the Negotiation

Team will continue to conduct oral negotiation sessions and written negotiations, as needed, with

Respondents with whom it wishes to continue negotiating, culminating in a request for Best and

Final Offer(s) from the Respondent(s) the Negotiation Team feels are likely to offer the best value

to JEA based on the Selection Criteria set forth in the ITN. These Best and Final Offer(s) will be

reviewed and analyzed by the Negotiation Team, following which the Negotiation Team will

make a recommendation identifying the award it assesses as offering the best value to JEA

based upon the Selection Criteria

• During this time, unless expressly instructed otherwise by the Designated Procurement

Representatives, any communications between Respondents and JEA or its representatives

outside of recorded negotiation sessions must be directed to the Designated Procurement

Representatives as explained in Section 2.11 of the ITN (as revised by Addendum #2). Questions

from Respondents may appropriately be posed to the Negotiation Team at future negotiation

sessions. In responding to such questions, as provided in Section 3.3.2 of the ITN, the Negotiation

Team will have access to Subject Matter Experts who are available to assist the Negotiation Team

as needed

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Today’s Agenda

1 Introduction Aaron Zahn, Managing Director and Chief Executive Officer

2 Key Investment Highlights Melissa Dykes, President and Chief Operating Officer

3 Electric System Overview Caren Anders, Vice President / General Manager, Energy

Steve McInall, Vice President & Chief of Energy and Water Planning

4 Water and Wastewater System Overview Deryle Calhoun, Vice President / General Manager, Water / Wastewater

Paul Steinbrecher, Vice President & Chief Environmental Services Officer

5 Financial Overview Ryan F. Wannemacher, Chief Financial Officer

7 IT and Compliance Shawn Eads, Chief Information Officer

Ted Hobson, Vice President & Chief Compliance Officer

8 Supply Chain Management John McCarthy, Vice President & Chief Supply Chain Officer

9 People / Culture Jon Kendrick, Vice President & Chief Human Resources Officer

Additional Growth Opportunities

Aaron Zahn, Managing Director and Chief Executive Officer

Ryan F. Wannemacher, Chief Financial Officer

Melissa Dykes, President and Chief Operating Officer

10

6 Customer Engagement Kerri Stewart, Vice President & Chief Customer Officer

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Section 1

11

Introduction

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INTRODUCTION

JEA is a unique opportunity of scale as one of the largest multi-use, government-owned utilities in the U.S. and the largest

in the state of Florida

JEA is exploring strategic alternatives to maximize customer, community, environmental and financial value

Electric System

• Consists of net capital assets of ~$2.7Bn

• 900 square miles of service area

• 7,061 miles of distribution wires

• 744 circuit miles of transmission wires

• Five generation facilities (1)

• 13 solar offtake agreements representing 289 MW (39 MW operating)

• One landfill gas offtake agreement (15 MW)

Water and Wastewater System

• Consists of net capital assets of ~$2.7Bn

• Four county service territory

• 100% groundwater supply

• 11,031 miles of pipe

• 38 active water treatment plants

• 11 wastewater treatment facilities

• 10 reclaimed water production facilities

Other Businesses

District Energy (The “District Energy System”)

• 4 chilled water plants

• Total capacity of 20,700 tons

Communications

• 675-mile fiber optic network / 40 macro sites / 200,000+ poles

St. Johns River Power Park (“SJRPP”)

• 1,600 acre site in NE Jacksonville

• Direct rail and port access

EBITDA Calculation: EBIT + D&A = 412.022 + 363.534 = 775.556

DSCR Calculation: EBIT / (Principal + Interest + Lease Payments) = ???

Note: 1. 4 generation facilities owned & operated by JEA; partial ownership in Plant Scherer Unit 4

Unique, Best-in-Class Utility, with Significant Growth Opportunities

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Constraints That Inhibit Evolution of JEA’s Business

INTRODUCTION

JEA is subject to several constraints due to:

• Constitution of the State of Florida

• Florida Public Service Commission

• City of Jacksonville Charter

• Florida Statutes

• Bond Resolutions

• Policy Considerations

• Business Structure as defined by Charter

Collectively, these constraints limit JEA from diversifying and

implementing creative profit generation initiatives and

cripples JEA’s ability to evolve and remain relevant to

address customer and community needs, as well as market

and industry trends

What other companies do when faced with a cash gap:

Opportunity

Sell more kWh or kGals to existing customers

Cut costs and workforce

Increase prices on kWh or kGals for customers

Invest in R&D and IP for an ROI

Sell alternative new product lines or offerings

Sell equity and retire debt

Acquire new businesses & customers

Sell assets

Reduce dividend / city contribution

Reduce investment in capex

Create partnerships/JV’s

Can JEA do this?

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Three core enabling factors unlock value

View capital access as

an advantage, not a

barrier

Set ambitious goals for how

JEA can evolve and create

value

Leverage synergies and

capabilities with partner(s)

JEA

Scale

Capital Evolution

… in three types of previously constrained

opportunities in energy and water

Critical Factors to Future Success Across Energy and Water

INTRODUCTION

S

c E

S

c E

S

C E

S

C E Market expansion

Unregulated opportunities S

C E

Capital-enabled regulated

opportunities

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Multi-Energy Station

Battery Storage Systems

Big Data

Renewable Natural Gas

EV Car Sharing

Sustainable Development

Organics Recycling

Protecting the St. Johns River

Conserving our Water Resource

Beneficial Reuse of Byproducts

Integrated Water Resource Planning

Purified Water

Electric Bus

Blockchain

Intelligent Transportation

Microgrids

Accelerating energy and water innovation…

Operational

improvements 1

Strategic capital

investments 2

Core growth

opportunities 3

Additional growth

opportunities 4

…in four types of initiatives

INTRODUCTION

The Strategic Planning Process Developed Four Types of Initiatives

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16 INTRODUCTION

Measure of Value 2030 Aspirations

Environment

▪ Become a regional leader in renewable generation

▪ Maintain operational excellence in water and wastewater, modernizing the system to maintain top quartile performance

across the US

Community

▪ Invest in the next generation of public infrastructure services – mobility, resiliency, communications and energy

▪ Make JEA a best in class place to work, fostering innovation,

collaboration and career development opportunities for JEA

employees

Customer

▪ Maintain customer affordability, keeping bill increases below

inflation

▪ Transform the customer experience by applying data, analytics and digital technology to customer-facing channels

Financial

▪ Grow earnings 5-7% year-over-year

▪ Diversify JEA’s revenue sources beyond traditional water and

electric sales

▪ Continue to deliver financial value to the City of Jacksonville

The 2030 Strategy Sets New Aspirations Across Each Measure of Value that Go Well Beyond JEA’s Current Capabilities

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JEA in 2030 (2030 Strategy)

JEA in 2030 (Under Current Government Ownership)

~$232MM (1) ~($11MM) Electric Earnings in 2030

$4.4Bn (2) $2.5Bn Electric capital invested

57% / 43% -9% / 109% Earnings split

ELECTRIC/WATER

~815 MW 0 MW MW of new utility-scale

renewable generation (3)

The “Balanced” JEA of 2030 – A Scorecard

INTRODUCTION 17

Notes: 1. Assumes perfect rate-making with a 52.5% equity layer and a 10.6% ROE on the electric system and a 10.0% ROE on the Water System does not conform to the rate stability case in the Respondent Financial Model 2. Total capital invested based on Financial Model from 2020–2030 3. Excludes PPAs currently in place

~$173MM (1) ~$136MM Water Earnings in 2030

~$405MM (1) ~$125MM Total Earnings in 2030

15 MGD None Alternative Water Opportunities

$3.0Bn (2) $2.2Bn Water capital invested

$7.4Bn (2) $4.7Bn Total capital invested

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Minimum Requirements

Financial 1. >$3Bn of value to the City of Jacksonville

Customers

1. >$400MM of value distributed to customers (rebate of $300 for each water customer accountholder, $500 for each electric customer accountholder, $180 for each wastewater customer accountholder and $100 for each reusable water customer accountholder)

2. At least three years of contractually guaranteed base rate stability for customers

Environmental

1. Commitment to develop and provide the City of Jacksonville and the Duval County Public School system with 100% renewable electricity by the year 2030

(2)

2. Commitment to develop and provide 40 million gallons per day (“MGD”) of alternative water capacity for Northeast Florida by the year 2035

(2)

Community Impact

1. Protection of certain employee retirement benefits(3) (4)

2. Maintenance of substantially comparable employee compensation and benefits for three years

3. Retention payments to all full-time employees of 100% current base compensation(3)

4. Commitment to new headquarters and employees in downtown Jacksonville, contributing to the economic development of the community

(5)

Notes: 1. NPV of JEA’s expected contribution to the City of Jacksonville over the next 20 years 2. Renewable electricity and alternative water to be provided at new or existing tariffs at a price equal to or less than the applicable tariff rate 3. Certain employee-related minimum requirements are subject to collective bargaining, as applicable 4. The Jacksonville City Council approved legislation on September 24th satisfying this requirement 5. JEA’s new headquarters is currently under initial stages of development in downtown Jacksonville. The process goal is commitment to the current downtown headquarters project

INTRODUCTION 18

The overall purpose of this undertaking is to give JEA the strategic flexibility to adapt to a once-in-a-generation,

industry-wide transformation and help it achieve its vision to improve lives in the Northeast Florida community

Process Goals Represent Recognition that Substantial Shift Requires Dramatic Results

S

C E

Section 2

19

Key Investment Highlights

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KEY INVESTMENT HIGHLIGHTS 20

Business Highlights

• Largest government-owned utility in Florida

• Eighth-largest government-owned utility in the U.S.

• Top 10 water and wastewater utility in the U.S.

Unique Opportunity of Scale

1

• Top-quartile utility in customer satisfaction, as rated by JD Power

• Industry leading operational metrics

High-Quality Operations

2

• ~$1.2Bn of capital invested in the utility over the past three years; $614MM in the electric system (“Electric System”)

and $598MM in the water system (“Water and Wastewater Systems”)

• Net capital plant of ~$5.5Bn: ~$2.7Bn at the Electric System and ~$2.7Bn at the Water and Wastewater Systems

• ~$2.9Bn capital expenditure program planned over the next five years

Significant Asset Base with Attractive

Investment Dynamics

3

Stable, Low-Risk Regulatory Environment

• Mature core utility business with low operating risk

• Utility business historically characterized by the need for significant investment and limited exposure to economic

cycles

• Constructive utility regulatory environment

4

• Seventh-largest population gain in 2018 amongst U.S. cities

• Labor market thriving with unemployment rate of 3.0%, below both Florida and national unemployment rates

• No state or city personal income tax

Large, Growing Jacksonville MSA

5

Net Capital Assets updated

Capex updated

Operational improvements

• Redesign JEA’s operating practices to achieve top-quartile performance as measured against JEA’s peer set

Strategic capital investments

• Make incremental investments in traditional utility infrastructure to deliver new outcomes and benefits to our

customers (e.g., climate resiliency, grid flexibility and customer choice, clean and sustainable, etc.)

Core growth opportunities • Invest in new growth businesses core to the utility model: transport electrification, energy efficiency, distributed

generation

Additional growth opportunities

• Identified additional growth initiatives that position JEA as a growth platform, that are not included in the

model

Supportable Execution Plan to Become A Leading Platform

6 1

2

3

4

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

As part of its 2030 Strategy, JEA will implement the initiatives that JEA’s Senior Leadership Team (“SLT”)

incorporated into their 2030 Strategy base case projections (the “2030 Strategy” or “Management Case”)

Core guidelines of the Strategy Work JEA has undertaken to date to build the Strategy

Build from the baseline

• Assess the strategy relative to the baseline as outlined in the May Board package

Apply a non-governmental lens

• Assume a regulated rate base and corresponding revenue requirement

Take an unconstrained view

• Assume JEA can alleviate the constraints associated with JEA’s existing charter

Contemplate strategic partners

• Assume JEA can access the capital

and capabilities required to execute the strategy through partnerships

Transition

• Develop guiding principles and strategic framework, corporate dashboard and financial tools to support strategy assessment

Establish baseline

• Assess current “business as usual” financial

projection

Strategy development

• Design strategies to meet future targets and challenges

–“Traditional” response (within existing charter)

–2030 Strategy, “Non-traditional” unconstrained strategy

Guidelines to Building a ‘New’ Strategy for JEA


PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

• JEA, as a core infrastructure service provider, can expand on its current position and harness new revenue growth

• JEA will achieve these aspirations through execution of the Management Initiatives –____ operational improvements, strategic

capital investments, core growth opportunities along with additional growth opportunities outside the scope of the

Respondent Financial Model


Overview

Digital

Capture new data sources, automate workflows and digitalize processes to ensure JEA has access to the suite of capabilities it needs to execute

Regulatory and policy strategy

Develop regulations, policies and legislation to authorize or continue to enable JEA to execute

Management

Initiatives

Enablers

Additional Upside Not

Reflected In Respondent

Financial Model

• Water and Wastewater

System expansion

• Growth of the District

Energy System

• Further dark fiber

utilization

• Establishment of LNG,

port, rail and/or data

center facilities

• Future home


Increase the efficiency

and productivity of JEA’s

operations and O&M

and capex spend to

create investment

headroom to reinvest, to

support customer

affordability, and to

improve service quality

and performance

outcomes

Operational

Improvements

Reflected In Respondent

Financial Model

Supportable Execution Plan to Become A Leading Platform

1 4

Make incremental

capital investments in

JEA’s core, existing utility

businesses that expand

the capabilities of JEA’s

infrastructure to serve

customers while growing

earnings and the

regulated asset base

Strategic Capital Investments

2

Invest in new growth

businesses – both within

the regulated utility and

beyond it – that grow

JEA’s earnings through

delivery of new services

and solutions to JEA

stakeholders

Core Growth Opportunities

3

Partially reflected In Respondent Financial Model

1 2 3 4

S

C E

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Additional Upside Not Reflected In Respondent Financial Model

Reflected In Respondent Financial Model

5% annual earnings growth 7% annual earnings growth

Electric – 2030 Earnings (1)

274

Water – 2030 Earnings (1)

314

255

Unregulated Opportunities M&A Opportunities Regulated Opportunities

•JEA will

achieve

industry

earnings

targets of 5-

7% within its

regulated

construct

•In addition,

JEA will

pursue

longer-term

opportunities

to create

value

through

adjacent

growth

businesses

Notes:

1. Assumes perfect rate-making with a 52.5% equity layer and a 10.6% ROE on the electric system and a 10.0% ROE on the Water System does not conform to the rate stability case in the Respondent Financial Model

2. Earnings impact of being an IOU as well as perfect rate making through 2030 assuming the capital schedule provided in the financial model Management Case

3. Earnings impact of Operational Improvements and certain Strategic Capital investments and Core Growth Opportunities as budgeted by JEA’s SLT

4. Additional Strategic Capital Investments and Core Growth Opportunities not captured in the Management Case reflected in the financial model by running case 3 on the Control Tab cell I10

5. Estimate of potential earnings under a high case. Other additional growth opportunities (e.g., expansion of dark fiber leasing, SJRPP monetization, District Energy System expansions) not reflected here

6. Assumes upside case for acquisition of water utilities along I-10, I-4, I-75, and I-95 routes

222


The 2030 Strategy Delivers the Earnings Needed to Meet JEA’s Targets, with Upside Potential from Adjacent Growth Businesses

($MM, unless otherwise noted)

S

C E

(6)

(2)

(5)

N/A

(2)

(3)

(3)

(4)

(4)

149

232 259

304

43 40

27 45

JEA Today IOU capital

structure & growth

through 2030

Management

Initiatives

Respondent

financial model

(Management Case)

Community

Improvement

Initiatives

Respondent

Financial Model

including Community

Improvement

Initiatives

Future home

opportunities

Total

130 6

173 173

241

37

68

JEA Today IOU capital

structure & growth

through 2030

Management

Initiatives

Respondent

financial model

(Management Case)

Community

Improvement

Initiatives

Respondent

Financial Model

including Community

Improvement

Initiatives

Water System

M&A

Total

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

2020 2021Jan Feb Mar April May Jun Jul Aug Sep Oct Nov Dec Jan

Selection and approval process (exact timing to be determined)

Coordinate transformation

JEA Board meetings to review partner selection

Implementation (details follow by initiative)

Create office

Partner selection and negotiation

Implementation (details

follow by initiative)

Planning (details follow by initiative)

Implementation (details

follow by initiative)Planning (details follow by initiative)

Planning (details follow by

initiative)

Planning (if necessary)

Create office

Planning

Key milestones

Growth opportunities

Upside opportunities

Corporate governance

Strategic capital

Business/corporate development

Operational improvements

Next steps

1

2

3

4

5

6

Transformation office7

To be determined through the ITN negotiating process

Potential Timeline to Prepare JEA for Strategy Execution


PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Overview of Operational Improvements


JEA is launching a set of initiatives that cut across business functions to increase quality of service while reducing costs

Frontline

operational

improvements

• Implement lean process improvements to drive increased productivity that will be monetized through attrition,

e.g.:

─ Eliminate wait times in core processes (e.g., crews have required materials to complete at job at the start of the

shift)

─ Eliminate unnecessary work or processes (e.g., stop preventative maintenance and inspections that don’t

improve asset performance or health)

─ Streamline routing of crews and materials to lower transportation costs (e.g., redesign work planning and

dispatch)

Digitalization

and

automation

• Leverage digital tools to redesign our ways of working (e.g., predictive maintenance algorithms, automated

scheduling tools that prioritize and assign work to the right crews at the right time)

• Provide seamless, low-touch digital channels to meet customer needs through mobile and web platforms

• Automate and streamline basic tasks, including customer interactions, using process automation, self-service

tools, and intelligent chatbots

Spend

management

• Optimize the demand for materials and 3rd party services across the organization (e.g., frequency of

replacements, revising required specs of materials and scope of services, deferring or cancelling unnecessary

spend)

Optimization of

fuels and

energy

consumption

• Reduce heat rate to minimize fuel consumption through performance tracking and targeted technical

improvements

• Minimize consumption of auxiliary load across JEA’s facilities (e.g., turning off unnecessary equipment)

Strategic

sourcing

• Scrub the capital portfolio against JEA’s strategic priorities, eliminating or deprioritizing non-critical projects

• Optimize project delivery (e.g., integrated design and project execution) to deliver the work at a lower cost

• Manage strategic sourcing events to maximize value to JEA, leveraging the full suite of tools available –

commercial negotiations (e.g., fact-based, value-focused negotiations with suppliers) and process improvements

(e.g., developing and managing systems to claim warranties)

S

C E

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Overview of Strategic Capital


System resiliency

Reduced impacts on utility services from extreme weather events through the deployment of new technologies and enhanced design standards

Grid flexibility The ability to use a growing, diverse set of resources to dynamically shift demand (load) or supply (generation) across multiple timescales, depending on system needs

Advanced asset

management (1)

Improved observability of infrastructure systems through the deployment of distributed, intelligent devices and advanced operational technology platforms

Septic tank phase-outs

Cleaner, safer, and more convenient wastewater services through system expansion and phase-out of septic tanks

Alternative water supply

Accelerated plans to expand reclaimed water infrastructure

Electric Water Cross-cutting

• There are significant investment opportunities incremental to JEA’s baseline (i.e., the 10-year capital forecast)

‒ The capital associated with these investment opportunities are included in the Respondent Financial

Model as separate, discrete line items

• The following pages show both specific potential investments and a reasonable 10-year capital program for each category

• Unlike the rest of JEA’s capital

plan, these figures do not reflect a bottom’s-up, granular investment plan

S

C E

Note:

1. Advanced asset management investments (e.g., data and analytics platforms) can support both electric and water businesses (e.g., predictive maintenance strategies, crew routing and dispatching). A greater share of the required capital

identified to date is related to the electric business (e.g., transformer monitoring solutions, new WMS), so the capital associated with advanced asset management ($70M) has been fully allocated to the electric business in the Respondent

Financial model as a simplifying assumption

27

Section 3

Electric System

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Notes:

ELECTRIC SYSTEM 28

Subsection A

OVERVIEW

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Overview

• JEA is the eighth largest municipally owned electric utility in

the United States in terms of number of customers

• The JEA Electric System is an integrated energy provider

engaged in electric power production and transmission and

distribution operations

• JEA delivers approximately 12.5 billion kilowatt hours (“KWh”)

of electricity to 475,786 customers in Northeast Florida

• JEA’s 900 square mile service territory encompasses virtually

the entire City of Jacksonville as well as portions of St. Johns,

Clay, Nassau, Baker and Duval Counties

ELECTRIC SYSTEM

JEA Electric System

JEA Service Territory

Current JEA Residential Rates (1)

GA

JACKSONVILLE

Nassau

Clay

Duval

St. Johns

Note: 1. Estimated IOU rates to be included in Respondent Financial Model; total rates include Fuel & Purchased Power; denominator in all cases is Sales to Ultimate Customers

Current JEA Commercial & Industrial Rates (1) (Revenue / kWh) (Revenue / kWh)

JEA Rates

0.114 0.108

0.131

0.113

0.126

0.082 0.084 0.092

0.082

0.096

$0.040

$0.060

$0.080

$0.100

$0.120

$0.140

JEA FPL Duke TECO Gulf Power

Total Residentital Rate Residential Rate Base

0.087 0.084

0.096 0.090 0.091

0.054 0.058 0.056 0.058

0.061

$0.040

$0.060

$0.080

$0.100

$0.120

$0.140

JEA FPL Duke TECO Gulf Power

Total C&I Rate C&I Base Rate

29

Source: FTI Florida Electric Utilities Rate Comparisons, 2019 Annual Disclosure Report

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Customer Breakdown

Ten Largest Customer Accounts Annual $ Billed % of Revenues

U.S. Navy Public

Works Center 24,139,244 1.9

City of Jacksonville 22,627,898 1.8

CMC Steel Florida 18,644,348 1.5

Duval Counting School

District 14,725,557 1.2

WestRock CP LLC 13,367,030 1.1

Southern Baptist Hospital

of Florida Inc. 8,518,750 0.7

Publix Supermarkets Inc. 7,967,480 0.6

Johnson & Johnson

Vision Care Inc. 7,762,522 0.6

Mayo Clinic Jacksonville 7,561,055 0.6

Anheuser Busch, Inc. 7,253,348 0.6

Total 132,567,233 10.7

ELECTRIC SYSTEM

Electric System Customer Overview

Growing Customer Base with Low Concentration

• Total revenues, including investment income, for the Electric System for FY2019 were approximately $1.275Bn

• 47% of the Electric System’s revenues were contributed by commercial and industrial customers

• 49% of the Electric System’s revenues were generated by its residential customers

– These customers spend ~$1,500 on average annually for service

Revenues ($ in miilions) System Sales (MWh)

Total: $1,275

Total: 12,465,958

466 476

440

465

490

FY2018 FY2019

Average # of Customer Accounts

(000’s)

3%

Average # of Accounts

Total: 475,786

Commercial

& Industrial 12%

Residential

49%

Commercial

& Industrial

47%

Commercial

& Industrial

55%

Other 4%

Residential

88%

Residential

44%

Wholesale

1%

Overview FY2019 Top Ten Electric System Customers

30

Source: 2019 Annual Disclosure Report, 2019 FY JEA Unaudited Financials

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Generation Overview

• The generation fleet consists of four owned and operated power plants that use fossil fuels, primarily natural gas, with generating capacity of 2,935 Megawatts(1) (“MW”), a joint ownership interest in Plant Scherer Unit 4, which has a net generating capacity of 198 MW, and various power purchase agreements

– JEA’s four owned and operated plants include the J. Dillon Kennedy Generating Station (“Kennedy”), the Northside Generating Station (“Northside”), the Brandy Branch Generating Station (“Brandy Branch”) and the Greenland Energy Center (“GEC”)

– JEA’s generation fleet resources are committed and dispatched on an economic basis as necessary to serve JEA’s load

• JEA is dedicating capital to ensure the long-term availability of safe, reliable power while taking into consideration the age of its generation assets, prospective environmental regulations, energy

efficiency and demand-side management and evolving customer preferences and expectations

Generation Facility Locations

Facility Primary Fuel Type Capacity (MW) (1) Year in Service

Gas Fuel:

Brandy Branch Natural Gas 815 2001-2005

Northside Unit 3 Natural Gas / Oil 524 1977

Kennedy Natural Gas 382 2000-2009

GEC Natural Gas 382 2011

Solid Fuel:

Northside Units 1&2 Pet Coke 586 2003

Scherer Unit 4 Coal 198 1989

Peaking Reserve:

Northside CTs Diesel Fuel Oil 246 1975

Total 3,133

Generation Fleet

Source: 2019 Annual Disclosure Report

ELECTRIC SYSTEM

Note: 1. Reflects Winter Net Capacity

Overview

GA

JACKSONVILLE

Nassau

Clay

Duval

St. Johns

GA

31

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Note: 1. The average dispatch prices at maximum load for each unit from 10/1/2018 through 9/30/2019

ELECTRIC SYSTEM

Dispatch Stack (1)

Ca

pa

city (

MW

) 16%

10%

49%

24%

1%

2019 Actuals

13%

19%

46%

5%

5%

12%

2023 Forecast

Renewables Gas Coal Pet Coke Purchased Power Nuclear

0

500

1,000

1,500

2,000

2,500

3,000

FY18 FY19

NS CFB (Pet Coke,

Coal & Gas)

$33.80/MWh

NS CFB (Pet Coke,

Coal & Gas)

$31.37/MWh

NS3 (Gas)

$31.71/MWh

NS3 (Gas)

$33.51/MWh

Simple Cycle CT (Gas)

$33.04/MWh

Simple Cycle CT (Gas)

$31.26/MWh

Scherer 4 (Coal) $25.16/MWh

Scherer 4 (Coal) $24.43/MWh

Combined Cycle (Gas)

$21.86/MWh

Wansley PPA $20.86/MWh

Combined Cycle (Gas)

$20.50/MWh

Wansley PPA $21.56/MWh

Weighted Average

Dispatch Cost $29.83

Weighted Average

Dispatch Cost $28.01

• JEA has undertaken a fuel diversification strategy that improves its competitive position in the electric services industry

• JEA has the ability to use natural gas as the primary fuel source with diesel as backup for generation in GEC CT1 and CT2, Kennedy CT7 and CT8 and Brandy Branch Units 1, 2 and 3

• The exhaust heat from Brandy Branch Units 2 and 3 is utilized in Brandy Branch STM 4. This combined cycle configuration provides additional energy without additional fuel consumption

• Northside Unit 3 uses natural gas as a fuel source for generation with residual fuel oil as backup

• JEA uses circulating fluidized bed technology in Northside Units 1 and 2. This technology allows JEA to use a blend of petroleum coke, bituminous coal and natural gas in these units

• Scherer Unit 4 burns sub-bituminous coal from the Powder River Basin, providing further fuel diversification

Fuel Mix

Source: 2019 Annual Disclosure Report

32

Generation Fuel Mix & Dispatch Stacks

FY2018 FY2019

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Source: JEA Ten Year Site Plan, April 2019

Solar PPAs

ELECTRIC SYSTEM

/

Cecil Commerce (50 MW)

Blair Road (4 MW)

Old Plank Road (3 MW)

Deep Creek (50 MW)

JAX Solar (12 MW)

Beaver St. (50 MW)

Forest Trail (50 MW)

Westlake Solar Center (50 MW)

Simmons Road (2 MW)

SunPort (5 MW)

Starratt Road (5 MW)

NW JAX Solar Partners (7 MW)

Nassau

Clay

Duval

St. Johns

Old Kings Road (1 MW)

Summary of Solar Power Purchase Agreements (“PPAs”)

Operating Planned

JEA retains buyout options on the Cecil, Forest Trail, Deep Creek, Westlake and Beaver St. facilities at 10 years,

20 year and 25 years, respectively

33

Project MW Counterparty Start Date

End Date

Length (Years)

Operating

JAX Solar 12 Sep-10 Sep-40 30

NW JAX Solar Partners 7 May-17 May-42 25

Old Plank Road 3 Oct-17 Oct-37 20

Starratt Road 5 Dec-17 Dec-37 20

Simmons Road 2 Inman Solar Holdings 2, LLC Jan-18 Jan-38 20

Blair Road 4 Jan-18 Jan-38 20

Old Kings Road 1 Oct-18 Oct-38 20

SunPort 5 Dec-19 Dec-39 20

Total Operating 39

Planned

Cecil Commerce Solar Center 50 Feb-21 Feb-45 24

Forest Trail Solar Center 50 May-21 May-46 25

Deep Creek Solar Center 50 Aug-21 Aug-46 25

Westlake Solar Center 50 Oct-21 Oct-46 25

Beaver St. Solar Center 50 Jan-22 Jan-47 25

Total Planned 250

Total Operating & Planned 289

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

ELECTRIC SYSTEM

Gas Pipelines within Electric System

Pipeline Name In-Service

Date Length (Miles)

Current Operating

Pressure (psig) JEA Delivery

Pressure (psig) Contractual Capacity % Pipeline Description

Southside Line 6/1983 6.3 250 50 JEA 73.33% / 2,200 Mcfh PGS 26.67% / 800 Mcfh

PGS's Main Gate Station to JEA's Southside Generating Station

Northside Line 6/1990 6.9 300 60 JEA 70.5% / 6,100 Mcfh PGS 29.5% / 2,550 Mcfh

PGS's Main Street Pipeline to the JEA's Northside Generating Station

Greenland Energy Center Lateral

12/2010 26.6 860 770 JEA 100% / 6,100 Mcfh Interconnection with SeaCoast pipeline

Baldwin / Brandy Branch Line

8/2006 7.5 600 475 JEA 50% / 4,058 Mcfh PGS 50% / 4,058 Mcfh

From PGS/SONAT Baldwin Gate to JEA’s Brandy Branch site

Brandy Branch Lateral

10/2000 18.6 850 475 JEA 100% / 7,200 Mcfh From mile marker 21adjacent to U.S. Highway 301 to Brandy Branch

SJRPP House Line (1) 2008 1.8 - - - -

Overview

Gas Pipelines

• Gas pipelines that supply JEA generation portfolio are under the jurisdiction of

the Florida Public Service Commission (“FPSC”)

• JEA and Peoples Gas (“PGS”) jointly own pipelines that serve Northside and

Brandy Branch. JEA assumes 100 percent of ownership of Brandy Branch-

Baldwin Lateral in 2030, under agreement with PGS

• JEA owns the GEC lateral pipeline (the “Greenland Lateral”) which is used to

deliver gas to GEC. JEA has a firm intrastate gas transportation agreement with

the Seacoast Pipeline for service to the Greenland Lateral

• JEA has commitments to purchase natural gas delivered to Jacksonville under a

long-term take and pay contract for 61,000 MMBtu/day (~50% of JEA demand)

with Shell Energy North America L.P. (Shell Energy) that expires in 2021. This

contract has been extended for 60,000 MMBtu/day beginning 2021 through

2031

• JEA has long-term contracts with PGS, Florida Gas Transmission, Southern Natural

Gas and SeaCoast Gas Transmission for firm gas transportation

JEA is advantageously positioned near several major interstate gas pipelines compared with others in Florida

FGT – Jacksonville Lateral 16” – 20”

SNG – Cypress 24” SNG – South GA 12”SeaCoast 24”

PGS Distribution Lines

Regional Gas Pipelines Not Owned by JEA

34

Note: 1. SJRPP House Line not depicted on map due to its size

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

ELECTRIC SYSTEM

Transmission & Distribution System Overview

35

Transmission Line Overhead Miles Underground Miles

500 kV 75 -

230 kV 299 4

138 kV 204 3

69 kV 113 46

Nassau

Clay

to Georgia’s Integrated Transmission System

St. Johns

GA

JACKSONVILLE

Duval

FPL

BALDWIN

to Seminole Electric Co-op

FPL

Transmission System

138kV

69kV

500kV

• 2 x ~37.5-mile overhead lines

• 0 underground miles

• Owned jointly with FPL

• JEA owns a 99.5% share of two 500 kV lines which

run from FPL Duval Substation, located near

Baldwin Florida, North to the Georgia state line.

• JEA also has direct access to Southern Company

via these transmission lines

• ~204 overhead miles

• ~3 underground miles

• Lines interconnect substations in most of JEA’s

high load and growth areas



• Lines located in the dense interior section of the

Electric System’s service area, in the vicinity of the

urban core

230kV



• Lines form a semicircular loop around the City with

transformation from the transmission system to the

distribution system performed at numerous JEA

facilities • The distribution system covers approximately 7,028 circuit miles and

is composed of three voltage levels depending upon the area served.

– The central business district is served by a 13.2 kV underground secondary network

– Surrounding residential and commercial areas are served primarily at 26.4 kV, with some 4.16 kV and 13.2 kV interspersed

– Most older areas are served from overhead distribution lines; however, the majority of all new developments constructed since

1968 are served by underground 26.4 kV distribution

• The transmission and distribution system is controlled by the system operators through a supervisory control and data acquisition system

• The JEA’s transmission system consists of 744 miles of all JEA-owned bulk power transmission facilities operating at 69 kV or higher

− 691 are overhead miles and 53 are underground

− JEA owns two 500 kV lines jointly with FPL that are connected between the FPL Duval Substation and the GPC system at the Florida state line

• There are currently 90 substations in the JEA Service Territory

Transmission & Distribution System

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Notes:

ELECTRIC SYSTEM 36

Subsection B

Current Operations and Management

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Electric Service Reliability • Outage frequency and

duration have been reduced significantly over the last 9 years

Transmission Line Reliability • Overall downward trend over

the last eight years • FY19 (1.2) is better than target

CEMI-5 • Significant improvement trend

over past three years for CEMI5

• 407 (0.08%) of our customers have experienced more than 5 outages in the past 12 months, a record low for JEA

JEA continues to show

favorable trends over time

across all other operational

metrics

0

1

2

3

4

5

6

7

8

FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19

FAU

LT F

REQ

UEN

CY

IND

EX

0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

160.0


OU

TAG

ES /

YEAR

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19O

UTA

GES

/ YE

AR

ELECTRIC SYSTEM

T&D Grid Performance Metric FY2017 FY2018 FY2019 Target FY2019

Customer Outage Frequency # of Outages per Year 1.6 1.4 1.6 1.3

Electric Outage Duration # of Minutes out per Year 100 67 75 60

Transmission Line Faults # of Faults per 100 miles 1.9 2.2 2.5 1.2

CEMI5 % Customers > 5 outages per yr 1.07% 0.40% 0.80% 0.08%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

Sep-14 Sep-15 Sep-16 Sep-17 Sep-18 Sep-19

Electric Service Reliability: SAIFI Electric Service Reliability: SAIDI

Transmission Line Reliability: TAFFI CEMI-5

37

Transmission & Distribution System Metrics

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Transmission & Distribution System Improvements | Resiliency Programs

ELECTRIC SYSTEM

• Historically, like most electric utilities, JEA built distribution lines to meet a minimum

level for performance and safety

– Adherence to the National Electric Safety Code (NESC)

– Run to failure approach, with minimal focus on preventative/predictive

maintenance

– Little attention to power quality and reliability

• In the 1980s, JEA began to focus more on building and maintaining systems above

the minimum threshold, seeking to improve power quality and reliability for

customers

• In the 21st century as JEA transforms into the Utility 2.0 model, the old approach

towards resiliency is not adequate anymore

Background

• In 2007, JEA initiated an on-going resiliency program based on the traditional system

hardening methods with an approximately $20MM annual budget

• Distribution System Inspection & Pole Replacement Programs

– JEA inspects its entire distribution system on a rolling 8-year cycle

• Vegetation Management Program ($6.5MM annual budget)

– JEA performs industry standard vegetation management on its 3,000 miles of

overhead distribution a rolling 2 ½-year cycle

• CEMI-5 Program ($24MM invested over the last 5 years)

– Targeting customers and neighborhoods experiencing more than five outages in

excess of 1 minute over 12 months

– Over 875 projects completed in the last 3 years, involving work at over 12,000

locations

• In 2017 JEA launched a new program reducing customer outage duration utilizing

more advanced technologies ($30MM invested over four years)

– Program includes the installation of 129 Automated Switches (AS), 54 Automated

Reclosers (AR), 2,285 Trip Savers (TS), 3,000 Fault Current Indicators (FCI)

JEA Took Action

38

https://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=2ahUKEwjBypyx_7jgAhXHtlkKHa9AAQUQjRx6BAgBEAU&url=https://www.jea.com/about/electric_generation/reliability/vegetation_management/&psig=AOvVaw0d6H2W0ywv1PIlSjQWGt_2&ust=1550157032383180

PROJECT SCAMPI

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142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

ELECTRIC SYSTEM

Background

• JEA began installing underground distribution lines in the early 1970s

– primarily for aesthetic reasons accompanied by strong

community and developer interest

• City ordinance passed requiring underground electric for all new

subdivision development projects

• In June 2019, Senate Bill 796 (“SB 796”) went into effect in Florida,

requiring each of the IOUs to file 10-year system hardening plans,

mostly related to undergrounding wires, which will be recovered via

a charge separate from base rates

Opportunity

• Estimated cost to convert all of JEA’s 3,000+ miles of overhead

distribution lines is $6.6Bn (1)

– Currently ~57% of JEA’s ~7,000 miles of distribution lines are

underground, with ~43% remaining as overhead distribution lines

• Conversion to underground provides a rate/tariff option for

customers interested in exercising the opportunity

• JEA and the City have a program in place today to support and

enable underground conversion projects

• JEA has made significant investments in the past hardening and

improving the reliability of the entire distribution system

Undergrounding represents a significant incremental community improvement opportunity for capital to be

deployed throughout JEA’s Electric System

39

Transmission & Distribution System Improvements | Undergrounding Overhead Power Lines

Note: 1. From FY 2020 – FY 2030, the Respondent financial model includes $470MM of total capital expenditure in the “Management Case” and “Scenario A”, of which, $470MM corresponds to Management Case Initiatives

PROJECT SCAMPI

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251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Generation Performance Metric FY2017 FY2018 FY2019 Target FY2019

Generation Fleet Reliability Forced Outages Rate 2.2 2.1 2.0 4.9

Environmental Compliance Permit Exceedances 6 2 4 0

0

2

4

6

8


EFO

R

JEA Fleet Reliability: Forced Outage Rate

0

2

4

6

8

10


NUM

BER

OF

EVEN

TS

Environmental Compliance: Permit Exceedances

ELECTRIC SYSTEM

Environmental Compliance • We experienced 0 permit exceedances during

FY2019

• JEA remains actively engaged in preparing for

all new and emerging environmental

regulations

Generating Fleet Reliability • The JEA Fleet Forced Outage Rate exceeded

target through FY19 due to various issues

including extended unit recovery on NS Unit 2

as a result in plugging

• NGS personnel conducted a systematic review

of all control systems and operational

equipment associated with the Circulating

Fluidized Bed (“CFB”) and air flow systems,

resulting in the correction and reestablishment

of proper Original Equipment Manufacture

operational parameters

• Additional Preventive Maintenance work orders

have been initiated to create a proactive and

ongoing monitoring and corrective response

process

40

Generation Metrics

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ELECTRIC SYSTEM

Benefit Description

Provides Rate Stability for

Customers

• Transaction provides significant annual

cost savings beginning in 2020

• Allows JEA to maintain stable rates and

continue early debt retirement

Appropriately Sizes the

Generation Fleet

• Increases asset utilization

• Maintains cost effective system resource

mix

Reduces JEA’s Impact

on the Environment

• Reduces JEA’s CO2 output by 30% by

2030

• Decreases nitrogen to the St. Johns River

• Avoids future expense for compliance

with environmental rules

Stimulates Economic

Development

• Expands economic opportunities for

industrial and manufacturing growth on

1,000 acres of property in and around the

Port of Jacksonville

Proactively Addresses

the Future of SJRPP

• Transaction provided a clear path for the

termination of the SJRPP Joint Ownership

Agreement and the retirement of the

facility

The total transaction NPV benefit to JEA is approximately $460MM

Benefits of Transaction

• CO2 emissions decrease of ~31% from 2014 to 2017 is primarily due to increased dispatch of natural gas units vs. solid fuel (coal/pet coke) units

• Additional CO2 emissions decrease of ~13% from 2017 to 2018 is primarily due to decommissioning of SJRPP

– Reduces JEA’s CO2 output by 30% by 2030

• Further reductions in CO2 emissions are expected in the future from 2019 to 2024 due to the following:

– Recent combined cycle turbine upgrades at Brady Branch

– Planned heat rate improvements at Northside

– Planned solar additions between 2022 and 2023

- 1 2 3 4 5 6 7 8 9

10 11 12

2014 2015 2016 2017 2018 2019

Trends

CO2 Short Tons

41

Generation Improvement | The Decommissioning of St. Johns River Power Park (“SJRPP”)

Millions

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Northside Generation Station Limestone Utilization Improvement

• Limestone is used in the CFB Boilers to capture sulfur from the fuel and meet the emission limits

– The size of the limestone particle is directly related to the amount of sulfur captured and the amount of ash generated

– The results of independent testing show that the surface of the limestone particle which is calcium carbonate converts to Calcium Oxide when heated and reacts with the sulfur to create calcium sulfate

– The smaller the limestone particle the more surface area is available for sulfur capture

– The more surface area the less limestone by weight is required for a given fuel feed rate

• Project is being completed in two parts:

– Part one installed one limestone dryer and three crushes under Unit 1, which was the was completed in FY19

– Part two will install a second dryer in 2020 and a third dryer and three crushers in 2021 under Unit 2

ELECTRIC SYSTEM

2019 2020 2021

Task Name Jan

Ap

ril

July

Oc

t

Jan

Ap

ril

July

Oc

t

Jan

Ap

ril

July

Oc

t

Engineering

Procurement

Construction

Closeout

The estimated cost for part two of the project is ~$5.6MM and is captured in the Respondent financial model

42

Generation System Improvements | Northside Generation Station

PROJECT SCAMPI

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142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Notes:

ELECTRIC SYSTEM 43

Subsection C

Strategic Capital Improvements

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Evolution of Generation Portfolio in the Next Decade

JEA is planning two significant retirements and replacements to

maximize value to customers in the community:

• Beginning in 2025, JEA will replace the 524 MW Northside Unit 3 with a

natural gas combined cycle facility

– This replacement enables the smooth retirement of a vintage 1977

unit from JEA’s fleet and replacement with a more efficient facility,

improving JEA’s environmental footprint

• Later In the decade, JEA expects solar + storage to offset the costs of

operating Units 1 & 2, allowing JEA to replace 586 MW of coal

generation with clean, reliable capacity and energy

– Enhanced investment opportunity resulting in lower overall rates to

customers and substantially improving JEA’s environmental footprint

is a unique win-win-win opportunity

The Northside replacement initiatives and additions to JEA’s portfolio of solar PPAs represent a material increase in

renewable energy that has the ability to improve JEA’s environmental footprint and lower overall customer rates

ELECTRIC SYSTEM

Conventional Generation Fleet

Renewable Fleet of Future

Operating Planned

Counterparties (1): /

Inman Solar Holdings 2, LLC

Source: JEA Ten Year Site Plan, April 2019

Note: 1. JEA has a PPA with each of these counterparties; these PPAs include buyout rights for JEA at varying dates as negotiated with the respective counterparties

44

S

C E

PROJECT SCAMPI

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Northside Generation Station | Base Case

2001-2002

• Repowering resulted in 2.7 times the power output while decreasing air emissions and groundwater consumption by >10%

• New CFB Units 1 and 2, about 300 MWe each, equipped with modern pollution control equipment (Scrubbers, SNCR, Baghouses)

• Project cost $309MM (JEA $234MM, DOE $75MM)

• CFB’s allow for greater fuel flexibility(pet coke, Coal, other)

• Stack emissions for SO2, NOx, PM, CO, and VOC for Units 1, 2, and 3 were reduced by 10%, and also met more stringent operating permit limits

ELECTRIC SYSTEM

NGS Repowering Project

Key Assumptions

NGS Units 1 &2 Replacement with Batteries and Solar

0

10

20

30

40

50

60

Blended Solar, Solar + Storage LCOE

Capital recovery $ / MWh Fuel $ / MWh

O&M $ / MWh

FY2023 FY2020 FY2022 FY2021 FY2027 FY2024 FY2026 FY2028 FY2030 FY2029 FY2025

NGS Units 1&2 dispatch cost vs. blended solar, + solar

storage LCOE

• ~50% of solar capacity has storage, 50% is standalone

• 28.0% capacity factor

• For solar paired with storage, 4 MWh duration per MW capacity

• Northside O&M held flat, with 2/3 allocated to Units 1 + 2

• ITC steps down to 10% in 2022

• IRENA cost curves

• 7% WACC used for capital recovery charges

45

S

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PROJECT SCAMPI

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72 72 72

75 121 163

207 120 0

78 106 47

Utility Scale Battery Storage Overview

• The new 5x50 MW Solar plants were contracted requiring the

developer to leave an area near the interconnection point with an

easy connection for future storage (“Plug and Play” Storage)

• In 2020, JEA will issue an RFP to establish the pricing for these

connections

• Quantity and capacity is yet to be determined, but JEA anticipates

in the vicinity of 20-30 MW per site (total of 100-150 MW)

• The primary use case for the storage would likely alternate – load

balancing in the summer and shoulder seasons (levelizing the real-

time solar output) and peak trimming in the winter

High Level Schedule

• Issue RFP in 2020 for both PPA or full ownership options. Determining

battery technology to be part of RFP submittal

• Begin negotiations and sign PPAs for all 5 sites

• Perform required Generator Interconnection studies for JEA and

FRCC and obtain approvals

• Construct and commission

• Achieve COD by December 31, 2022

ELECTRIC SYSTEM

Utility Scale Battery Storage

The cost for 150 MW’s for 4 hours of output is estimated around $180MM not including wholesale replacement of

Li-ion batteries every 10 years (cost not determined)

Task Name

Jan

Ap

ril

July

Oct

Jan

Ap

ril

July

Oct

Jan

Ap

ril

July

Oct

Issue RFP

Review submittals

Finalize Agreement

Initiate Studies

Construction

Test & Commission

COD

2020 2021 2022

46

S

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PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Virtual Power Plant Pilot Project Overview

• A virtual power plant (“VPP”) works remotely to combine a number of

independent energy resources from disparate locations into a network

that provides reliable power 24 hours a day

– These sources can be utility assets or behind the meter customer assets

• The plants employ software-based technology that relies on the smart grid.

– JEA has had preliminary discussions with Sonnen and Tesla, both of

whom are developing battery based VPPs

• For FY2020, the goal is to develop a pilot project plan to integrate a

customer battery program with a VPP package and build the groundwork

for deployment

• The vision is to develop a platform to accommodate VPP growth, which

will be more flexible (albeit potentially more expensive) than traditional

generation

– JEA will likely look at employing this technology as part of a microgrid

solution

Conceptual Schedule

ELECTRIC SYSTEM

Virtual Power Plant

The full deployment cost for 150 MW’s (30k units) of output is estimated around $243MM plus $5MM for

communication infrastructure not including wholesale replacement of Li-ion batteries every 10 years (cost not

determined)

Task Name

Jan

Ap

ril

July

Oct

Jan

Ap

ril

July

Oct

Jan

Ap

ril

July

Oct

Identify Pilot area

Identify Comm needs

Issue RFP

Review submittals

Finalize Agreement

Sign up Customers

Construction

Test & Commission

2020 2021 2022

47

S

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PROJECT SCAMPI

19 74

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251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Distributed Generation Overview

• JEA is developing plans to determine the viability of

integrating a utility-owned distributed generator (likely a gas-

powered Reciprocating Internal Combustion Engine (RICE))

or small turbine at 2 potential locations

– One near a large institutional campus; the other potential

site is near a large manufacturer

• This additional generation will accommodate future planned

load growth at either location and cover the contingency of

loss of one Substation Transformers at peak load times for

either customer site

Customer Focus - Resiliency

ELECTRIC SYSTEM

Utility Owned Distributed Generation

The estimated cost for six (6) - 18 MW RICE engines is $104MM plus gas line extension costs; cost for two (2) – 18

MW RICE engines is estimated at $45MM

• The DG allows for the creation of microgrids providing

additional resiliency for the targeted customers

Task Name

Jan

Ap

ril

July

Oct

Jan

Ap

ril

July

Oct

Jan

Ap

ril

July

Oct

Jan

Ap

ril

July

Oct

Develop Proposal

Meet with Customers

Create Scope of Work

Issue RFP

Review submittals

Finalize Agreement

Initiate Studies

Construction

Test & Commission

COD

2020 2021 2022 2023

48

S

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PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Notes:

ELECTRIC SYSTEM 49

Subsection D


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72 72 72

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ELECTRIC SYSTEM

How trends are creating opportunities Jacksonville Today How JEA will harness opportunities for customers

Electrified transport and facilities

• The transition to electrified products –

driven by declining costs and

evolving customer preferences –

requires significant infrastructure

investments and grows load

• EV penetration is

approximately 33% of the

national average (1)

• No plans to fully electrify

ports or municipal fleets

• Provide EV incentives, public charging infrastructure

and private charger installation, boosting EV

adoption to be in line with the US average

• Electrify the Port of Jacksonville / non-road end

users and municipal and public school buses

DG solar

and

storage

• Solar and storage LCOEs declined

nearly 3x in Florida from 2010-17 due

to lower hardware prices

• Customers are increasingly looking to

solar plus storage as a convenient,

affordable and reliable generation

option

• Fewer than 0.5% of

customers in Jacksonville

have installed DG solutions

• Build community solar, providing equitable access

to DG

• Offer residential storage installation to accelerate

pre-parity adoption

• Provide C&I DG installation services throughout the

region

Energy

efficiency

• Customers are seeking out an

increasingly sophisticated, robust set

of energy efficient (“EE”) home and

business solutions to manage energy

use

• Jacksonville residents are

increasingly adopting EE

products, but FL utilities

have been hesitant to seek

earnings on lost load (2)

• JEA has begun some public

lighting upgrades, in

partnership with the City (3)

• Seek incentives that provide fair compensation for

the deployment of EE devices

• Power Jacksonville’s streetlights with “smart”,

efficient lighting, building on current programs (3)

Notes: 1. As a % of car parc. Based on Management Response forecasts, in 2019, EVs comprised 0.2% of the JAX LDV fleet, vs. the national average of 0.6% 2. While US utilities, on average, earned 0.7% of 2017 retail sales from Energy Efficiency savings, Southeast utilities earned 0.3% 3. JEA has upgraded 30,000 traffic signal bulbs to LED, and has upgraded the majority of its streetlights (> 60%)

50

Opportunities Across Three Markets to Serve Customers More Effectively, Driving Development in Jacksonville

S

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Notes: 1. Detail follows. Initiatives with regulated capital deployment generate earnings via the regulated rate base. Initiatives with unregulated margins do not contribute to the rate base 2. Refer to the Respondent Financial Model for required rate of return

ELECTRIC SYSTEM

Core Growth Oppor-tunities

Electrified transport and facilities

Energy efficiency

DG solar and storage

Market Initiative (1)

▪ Expand incentives for electric vehicles and chargers 1

▪ Build out public DC FAST and L2 charging throughout Jacksonville

2

▪ Own and operate bus charging infrastructure for Jacksonville’s city and public school fleets

3

▪ Build an L2 home charger installation business 4

▪ Electrify the Port of Jacksonville 5

▪ Install “smart poles” to enable new smart city use cases 8

▪ Install, maintain and dispatch residential storage 6

▪ Build a C&I DG solar design, development, and installation business

7

Cumulative regulated capital deployment, 2020-30 (2)

Cumulative unregulated margins

$15MM --

$304MM --

$95MM --

-- <$1MM

$35MM --

$200MM --

$31MM --

-- $12MM

x Included in the Respondent Financial Model Community Improvement Case

x Included in the Respondent Financial Model Management Case and Management Case under Scenario A

JEA’s 2030 Core Growth Opportunities Consist of 8 Initiatives

51

S

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PROJECT SCAMPI

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72 72 72

75 121 163

207 120 0

78 106 47

ELECTRIC SYSTEM

Initiative JEA’s business model Start year

• Expand incentives for

electric vehicles and

chargers

• JEA will generate regulated earnings from the $15MM in Capex deployed to provide vehicle and

charger incentives to customers, and administer the overall program, contributing to an incremental

72GWh of load growth in 2030 by supporting EV market growth

• Build out public DC FAST and

L2 charging throughout

Jacksonville

• JEA will generate regulated earnings from the $304MM in Capex deployed to install and maintain

public L2 and DC Fast chargers, contributing to an incremental 72GWh of load growth in 2030 by

supporting EV market growth

• Own and operate bus

charging infrastructure for

Jacksonville’s city and

public school fleets

• JEA will generate regulated earnings from the $95MM in Capex deployed to design, install, and

maintain municipal electric school buses and public transit bus charging infrastructure in partnership

with the City and Jacksonville Public Schools

• Build an L2 home charger

installation business

• JEA will become the premier entity in Jacksonville to install the ecosystem of private home L2 chargers,

earning a 15% (1)

margin on installation, contributing to an incremental 72GWh of load growth in 2030 by

supporting EV market growth

• Electrify non-road end

uses (2)

• JEA will generate regulated earnings from the $35MM in Capex deployed from an ambitious program

to support electrification of port equipment and in-port activities (e.g., cranes and freight carriers)

2020

2021

2022

2023

2023

Electrification



4

3

2

1

5

Notes: 1. Assumes ~15% margin, $420/charger fee, and share of new chargers market reaching 27% in 2030 2. Capital opportunity reflects investment the Port of Jacksonville, but JEA will pursue other non-road electrification opportunities as well

52


S

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PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47


• Install “smart poles,” building

on JEA’s existing “smart

streetlights’ program

• JEA will generate regulated earnings from the $200MM in Capex deployed to build out “smart poles” in

its service territory to enable the roll-out of new public services and smart city use cases (e.g., free

community WiFi, environmental data sensors to support traffic algorithms, etc.)

ELECTRIC SYSTEM


• Install, own and dispatch

behind the meter DG

storage

• JEA will generate regulated earnings from the $31MM in Capex deployed to install and maintain utility-

owned behind-the-meter battery storage, “boosting” near-term DG uptake in the pre-cost parity years

• Build a DG solar installation

business for Industrial

customers

• JEA will provide solar design, development and installation services for C&I customers

2021

2022

2023

DG Solar and Storage

6

Energy Efficiency

7

8

53

Core Growth Opportunities Detail (cont’d)



S

C E

Section 4

54

Water System Overview

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Notes:

WATER SYSTEM OVERVIEW 55

Subsection A

Overview

PROJECT SCAMPI

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Wastewater System

• Approximately 4,113 miles of gravity sewers

and force mains

• 1,482 pumping stations and 754 low

pressure sewer units

• 11 treatment plants with a rated average

daily treatment capacity of approximately

123 MGD and maximum daily flow

capacity of 247 MGD

Overview

• The Water and Wastewater System provides service within the urban and suburban areas of Jacksonville. The Water and Wastewater System’s service territory extends into St. Johns County to the southeast of Jacksonville and Nassau County to the north and also serves a number of customers in Clay County to the southwest

• In 2019, JEA Water and Wastewater Systems generated $450MM in operating revenue, comprised of 39% water revenues, 57% wastewater revenues and 4% of revenues coming from water reuse

• The Water System, including reuse accounts, serves approximately 369,902 customers

• The Wastewater system serves 277,815 customers

Service Territory

Source: 2019 JEA Annual Report, June 25, 2019 JEA Board of Directors Board Package, 2019 FY JEA Unaudited Financials

WATER SYSTEM OVERVIEW

JEA Water and Wastewater Systems

Water & Wastewater Highlights

Nassau

St. Johns

Clay

Duval

GA

JACKSONVILLE

JEA Interlocal Agreement

JEA Service Territory (within Franchise)

JEA Franchise Territory

JEA Service Territory (within Interlocal Agreement)

Water System

• 20 major and 18 small water treatment

plants and two re-pump facilities

• 137 active water supply wells, and 4,806

miles of water distribution mains

• Total finished water storage capacity of

over 83 million gallons

• Two major and four small distribution grids

56

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Ten Largest Customer Accounts Annual $

Billed % of Revenues


Duval County School District

1,183,717 0.6

St. Johns County Utility 868,258 0.4

American Homes for Rent LP

659,306 0.3

Southern Baptist Hospital of Florida, Inc.

636,579 0.3

DR Horton, Inc. Jacksonville

506,283 0.3

Johnson and Johnson Vision Care, Inc.

473,175 0.2

St. Vincent's Health System, Inc.

395,469 0.2

The American Bottling Company

388,436 0.2

Mayo Clinic Jacksonville

337,468 0.2

Total 7,707,761 3.9

1046%

Customer Breakdown

Source: 2019 JEA Annual Report, 2019 FY JEA Unaudited Financials

Top 10 Customers for Water System


JEA Water System


• Serves 355,635 customer accounts and 14,267 reuse water

customers

• System is currently composed of 38 water treatment plants, two

repump facilities, 137 active water supply wells, ~4,806 miles of

water distribution mains and storage capacity of 83 million gallons

• The Water System provides service in an area currently comprising

~769 square miles in Duval County, approximately 63 square miles

in St. Johns County, approximately 77 square miles in Nassau

County and approximately 4 square miles in Clay County

Revenues ($MM) System Sales (kgals)

Total:

$178 Total:

37,696.072

348 356

325

350

375

FY2018 FY2019


(000’s) Average # of Accounts

Total:

355,635

Irrigation

10%

Residential 54%

Commercial

& Industrial

27%

Commercial

& Industrial

37%

Irrigation

19% Residential 48%

Irrigation

15%

Overview

Commercial

& Industrial 7%

Residential

82%

57

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Source: United States Department of the Interior, St. Johns River Water Management District, City of Jacksonville


Floridan Aquifer System Overview

Direct Access to a World-Class Water Source

• The Floridan aquifer system is one of the most productive aquifers in the world

• The Floridan aquifer system is the primary source of water for nearly 10 million people and supports agriculture, industry and tourism throughout most of the region

– ~3 billion gallons of water per day are drawn from the Floridan aquifer for public, residential and agricultural uses

• In most areas, including Jacksonville, water in the aquifer system needs very little treatment before use

• Water stored in the aquifer is replenished directly from rainfall

JEA’s Well Access System

• In the 1880s, Jacksonville became one of the first municipalities to use the Floridan aquifer as a public water source

• Today, JEA’s drinking water system consists of wells, water treatment plants, the distribution grid of pipelines and finally the customers’ meters

• JEA has over 130 wells that utilize turbine pumps to withdraw water from the Floridan aquifer, in the North grid pumps are 1,200 feet below land surface and in the South grid pumps are 800 feet below land service

– The fresh, clean water is pumped from the well fields to one of 38 water treatment plants

Area where Floridan aquifer system is thin due to intergranular gypsum

Thickness of Floridan aquifer system (In feet)

600

1200

1800

2400

3000

No data

GEORGIA

SOUTH CAROLINA

Atlantic Ocean

Gulf of Mexico

ALABAMA

JEA is positioned directly on top of the Floridan aquifer, one of the most productive aquifers in the world

58

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Customer Breakdown

Source: 2019 JEA Annual Report, 2019 FY JEA Unaudited Financials

Top 10 Customers for Wastewater System

Ten Largest Customer Accounts Annual $

Billed % of Revenues


Duval County School District

2,249,240 0.9

St. Johns County Utility 1,509,191 0.6

Southern Baptist Hospital of Florida, Inc.

1,048,756 0.4

Symrise, Inc. 1,045,916 0.4

The American Bottling Company

1,042,775 0.4

Johnson and Johnson Vision Care, Inc.

984,972 0.4

St. Vincent’s Health System, Inc.

934,011 0.4

WWF Operating Company

928,978 0.4

Mayo Clinic Jacksonville 857,977 0.3

Total 13,208,585 5.2


JEA Wastewater System


• Serves 277,815 customer accounts and is composed of 11 wastewater treatment plants with a rated average daily treatment capacity of 123 MGD and a maximum daily flow capacity of 247 MGD

– 1,482 pumping stations, 754 low pressure sewer units and 4,113

miles of gravity sewers and force mains

• Wastewater System experienced an average daily flow of 76 MGD and a non-coincident maximum daily flow of 106 MGD during the Fiscal Year ended September 30, 2019

• Service territory is essentially the same as that for the Water System, serving ~76% of the service territory

Revenues ($MM) System Sales (kgals)

Total:

$255

Total:

27,726.796

271 278

250

275

300

FY2018 FY2019


(000’s) Average # of Accounts

Total:

277,815

Commercial

& Industrial

7%

Residential 57%

Commercial

& Industrial

43%

Commercial

& Industrial

43%

Residential 57%

Overview

Residential

93%

59

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• The District Energy System consists of chilled water plants that

generate chilled water and underground piping, which

provides chilled water to customers for air conditioning

• Contracts are in place with 17 locations in the City to provide

chilled water from JEA’s four chilled water plants: Hogan’s

Creek, Downtown, Springfield, and San Marco. Current

contract demand for the four locations is 16,324 tons, with a

total capacity of 20,700 tons

• District Energy System revenues are generated by two types of

charges: a demand charge, based on the customer’s

estimated expected cooling load requirements, and a

consumption charge, based on the actual amount of chilled

water consumed

Overview

District Energy System

Source: 2019 JEA Annual Report, 2018 Annual Disclosure Report, 2019 FY JEA Unaudited Financials


$8.8 $8.8 $8.7 $8.9 $9.1

0.0

1.5

3.0

4.5

6.0

7.5

9.0

2015 2016 2017 2018 2019

($MM) District Energy System Revenues Per Year

• Four chilled water plants

• Total capacity: 20,700 tons

DISTRICT ENERGY SYSTEM

Service Locations

Vystar Veterans Memorial Arena City Hall Annex

Baseball Grounds of Jacksonville San Marco Place

Library / Library Garage Florida Proton Therapy Institute

Judicial Complex Shands Jacksonville

JEA Plaza University of Florida College of

Medicine

60

JEA District Energy System

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Water & Wastewater System Innovation

Water Pressure Sensor Project

Use Case

• Additional water pressure monitors to support the

development of Optimized Systems Control of Aquifer

Resources (“OSCAR”) 2.0

Complete

• An additional 58 water pressure sensor monitors were added

to the Nassau grid and displayed on AOI

• All pump stations in Nassau now have water pressure monitors

• Over 100 more added in JEA’s service territory to fill gaps in the

hydraulic model


Optimized Systems Control of Aquifer Resources

• Water pressure sensors

– Being added throughout to provide advance warning of main breaks and low pressures causing unsafe drinking water conditions

• Permanent leak detection sensors

– Being tested for large diameter water mains to predict leaks prior to catastrophic bursts

• IoT sensors on manholes

– Installed to alert of potential overflows to trigger quick response

• Web based Operational Awareness map

– Shows real time sensor data geographically

System Wide Operational Awareness

Geo-spatial, interactive 3D mapping system provides real-time condition monitoring of field assets, which allows effective deployment of crews to keep wastewater off the street

61

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Advanced Camera Technology

• Thermal Imaging cameras

– Identify temperature variances sending automated alerts

• HD cameras

– Provide visuals to monitor performance and assist in troubleshooting

• Night Vision cameras

– Monitor wet well for grease build up


Operations Monitoring

• Vibration Monitors

– Remotely sense abnormal vibrations to reduce wear and failures

• H2S Monitoring

– Senses odor conditions requiring odor control equipment maintenance required. Monitors for dangerous gas conditions in buildings

• Audible Capabilities

– HD cameras provide audible and visuals to monitor performance and assist in troubleshooting

• Conductivity and pH Monitoring

– Detects excessive inflow and infiltration, industrial waste, illegal dumping

• Force Main Flow and Pressure Monitoring

– Detects poor pump performance or force main stoppages

62

Water & Wastewater System Innovation | Virtual Pump Station Inspection

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Notes:


Subsection B


PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

CUP Condition 44: South Grid Wellfield Allocation Limits JEA Water Production vs CUP Limit

0

5

10

15

20

25

30

35

40

45

50

55

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

Bill

ion

Ga

llon

s

Actual YTD Allocation of CUP

CY2019 CUP Limit

2019 Consumptive Use Permit (CUP)


Consumptive Use Permit Metric FY2017 FY2018 FY2019 Target FY2019

Water CUP Limits (MGD) 114 (133 limit) 112 (135 limit) 138 limit 120

South Grid Wellfield Allocation (MGD) 48.62 (<50.23 limit) 46.35 (<50.23 limit) < 50.23 limit 49.06

Reclaim Usage (MGD) 20 17 19 19

Permit Limit YTD

Critical Wellfields Post 2014 2014 2015 2016 2017 2018 2019

Deerwood III 7.00 7.01 6.67 7.88 7.64 7.17 7.40

Ridenour 6.85 6.39 6.66 7.64 6.68 6.54 6.88

Oakridge 5.65 6.23 4.99 5.79 5.49 5.55 5.70

Greenland 4.53 1.53 4.27 4.16 3.99 4.18 4.26

Brierwood 3.02 4.53 2.84 3.36 2.98 2.43 2.64

Subtotal 27.05 25.69 25.43 28.83 26.78 25.87 26.89

Other Wellfields 23.18 20.92 22.07 24.12 21.85 20.48 22.18

Total South Grid 50.23 46.61 47.50 52.95 48.62 46.35 49.06

Total System ADF MGD 138 104 107 112 114 112 120

Actuals

Consumptive Use Permit

• Single consolidated permit for entire JEA service territory

• Issued 2011, expires 2031

• Individual wellfield allocations with flexibility for 28%

overage N Grid and 20% S Grid for drought years or

extenuating circumstances

• Forecasted Demand <142 MGD at 2031

• Caps water use S grid ~50 MGD

64

Water System Consumptive Use Permit

80

90

100

110

120

130

140

150

160

Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan-20

Flo

w (

MG

D)

Monthly Average CUP Limit Rolling 12 Mo. Average

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

0

20

40

60

80

100

120

140

160

180

200

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Gross GPCD Residential GPCD

Meeting Water Supply Challenges | Overview

Need for Alternative Water


• The Floridan Aquifer is approaching sustainable withdrawal limit

– Our population is projected to continue to grow and our available

water supply is limited

• Our community has done well as stewards of water resources but we

will challenges to ensure its sustainability

Water Use is More Efficient

• Historically water use paralleled population growth. This trend

changed around 2007 as a result of numerous conservation efforts:

– Passive conservation – houses, appliances, plumbing fixtures all

progressively more efficient

– Utility effort – strong tiered rates, public messaging, and continued

expansion of reclaimed to serve irrigation needs in areas of

greatest growth

Conservation Alone Will Not be Enough

• We know that conservation alone will not ensure a sustainable water

supply in the future

– Our conservation savings are very high already, with projections

reaching a leveling off period in the near future

– Using same amount of groundwater as 2006, serving 150,000 more

people

JEA OneWater Concept

• All water has been used before many times.

• JEA OneWater emphasizes protection of our water through

conservation and the diversification of supply, especially via reuse

• Sources in our area: Ocean, river, reclaimed. Reclaimed is a superior

source

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

50

60

70

80

90

100

110

120

130

140

150

1994 1999 2004 2009 2014 2019

Annual Average Accounts Average Daily Production

JEA Water Production Vs. Number of Accounts

Water Consumption on a Per Capita Basis

An

nu

al A

ve

rag

e D

aily

Flo

w (

MG

D) A

ve

rag

e N

um

be

r of A

cc

ou

nts

Ga

llon

s P

er

Ca

pita

Pe

r D

ay)

65

Notes: 1. FY04-FY11 values are estimates based upon finished water totals. FY12 to present are raw water totals 2. For the Average Daily Production, Fiscal Year data is used from 2001 to Present

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Meeting Water Supply Challenges | Reclaimed Water System


JEA’s Expansive Reclaimed Water System

• Started in 2000

– Focused on areas of greatest growth

– Greater than $100MM investment including significant cost share from St, Johns River Water Management District

– Significant change in average number of customer accounts trend beginning in 2008

• Used as a water resource, not disposal

– Conservation rates

– Reduce potable water use

• Winner of the FWEA 2015 David York Water Reuse Award

0

2000

4000

6000

8000

10000

12000

14000

16000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Nu

mb

er o

f C

ust

om

er A

cc

ou

nts

66

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47


Meeting Water Supply Challenges | Integrated Water Resource Plan

• Water and Wastewater planning has evolved from a traditional water -> wastewater -> discharge model to a full water ecosystem

• The ecosystem allows water and wastewater utilities like JEA to serve growing populations with reliable, safe, clean water supply in

an environmentally responsible way

• This ecosystem approach guides significant capital investments in the future

Integrated Water Resource Plan ‘One Water’ Philosophy

67

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Meeting Water Supply Challenges | Water Supply Planning Cycle


* JEA’s Total Water Management Plan (TWMP)

iWater JEA Water Supply Testing

and Rehabilitation Program

Production & Transmission

IWRP Study Integrated Water

Resource Plan

Supply & Transmission

Implementation Plan JEA Water Supply and

Demand Program

IWRP Implementation

FY15 to FY20 FY19 to FY21

• Well rehab and performance for 84 of JEA’s 137 raw water wells

• Hydraulic and water quality modeling

• Identify transmission piping projects

• Maximize reclaimed water

• TWMP* (FY 2000 to Present)

• Water purification demonstration plant

• 3rd river crossing evaluation

• Aquifer storage and recovery

• Alternative water supplies

• Demand-side management program

• Reclaimed Water

• JEA obtained a 20-year consolidated Consumptive Use Permit (CUP) in May 2011

• JEA continues to implement the wellfield rehabilitation and Reclaimed System expansion program

• Sustainable water supply will integrate outcomes of the IWRP

FY20 …

68

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Task Name 2019 2020 2021 2022 2023 2024 2025 2026

Phase II

Phase III

Phase II: Demonstration Phase III: Commercial Implementation Water Purification Demonstration Facility Potential for Planned Full Scale Deployment

Key Aspects

Capable of

producing up to 1.0 MGD

Cost

$15MM – $20MM

O&M

~$1MM/yr

Building Size

11,000 sq.ft.

Area

2-5 acres

Construction

18 Months

Learning Center area for public tours and

operator training

Offices for personnel, equipment, and

conference rooms

Demonstrating Safe and Reliable Alternative Water Supply Through a Collaborative Partnership with the State

Cost

$94MM

O&M

$5MM

Building Size

32,000 sq.ft.

Area

5-10 acres

Begin Design

3 years

Key Aspects

This facility currently has 1 MGD capacity, expandable to 10 MGD capacity

JEA plans to lead the state in full commercial application of

potable reuse results of Phase II performance optimization and

JEA’s Integrated Water Resources Plan (“IWRP”) will identify the

timing, quantity, and locational needs for implementing Phase III

of the WPT Program

Engineering and Construction Operation


Full scale implementation at 40 MGD would cost an estimated ~$815MM in CIP. 15 MGD implementation would cost an

estimated ~$389MM and is loaded in the financial model through 2030

Phase I: Research and Development • Phase I testing included testing of over 3,000 water quality samples to evaluate the performance of two water purification technologies

(UF-LPRO-AOP compared with Ozone-BAF-AOP)

• UF-LPRO-AOP was selected due to its operational advantages and the ability to consistently produce higher water quality at a similar cost,

– This state-of-the-art, multi-barrier treatment approach is both proven and reliable, making it the most widely-used water purification technology throughout the U.S. and globally

69

Meeting Water Supply Challenges| Purified Water Program

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47


Wastewater Improvements | Pelletizer Replacement

PUBLIC-PRIVATE PARTNERSHIP FOR ORGANIC RECYLING

The Buckman incinerator was replaced in 2000 with the

current pelletizer process which produces slow release

fertilizer. This has created beneficial reuse material, but the

equipment is coming to the end of its useful life and the

process is energy intensive

Moving to MORF facility- a carbon supplemented

composting process which will produce slow release fertilizer

product. This process is much less costly and energy intensive

which will allow digester gas to be marketed as a renewable

product and can be done at a lower cost to customers

Merchant Organics Recycling Facility (MORF) replaces Buckman’s pelletizer as the next generation in beneficial

use

70

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Wastewater Improvements | Renewable Natural Gas


• Biogas Credit Feasibility Study

underway

• Upgrade biogas from Buckman Water

Reclamation Facility (“WRF”) to a

purified Renewable Natural Gas

(RNG)

• Evaluate injecting RNG into

commercial natural gas pipeline

• Optimize production of RNG from

WRF digestion processes

• Avoids significant purchase of

quantities of natural gas needed to

produce pellets

By capturing waste gas produced by wastewater treatment, JEA reduces greenhouse gas emissions and

increases financial value

71

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

0

500

1,000

1,500

2,000

2,500

1970 1980 1990 2000 2010 2020

Estimated Tons of Total Nitrogen to the River Actual Tons of Total Nitrogen to the River

Ton

s o

f To

tal N

itro

ge

n t

o t

he

Riv

er/

yr

0.63 0.60

0.74

0.56 0.66

1.16

0.68 0.70

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019

Total Nitrogen Discharge to St. Johns River

SSOs Impacting Waters of the US (per 100 miles of pipe)


TMDL Permit Limit

683 tons/year

Environmental Compliance

Sanitary Sewer Overflows (SSOs to US Waters) • FY04 – FY07: 54 per year average

• FY08 – FY18: 33 per year average

• FY19: 36

Nitrogen Discharge to St. Johns River • Current 12 month rolling total is 393 tons versus permit of 683

tons

• In FY2019, JEA experienced its lowest nitrogen discharge to the St. Johns River in company history

NPDES Permit Exceedances • FY19 = 23, fewest number over past 10 years

• 45,000 permit compliance opportunities per year – the past 10

year average of 45 per year is excellent

72

Wastewater System Environmental Compliance

Wastewater Exceedances by Fiscal Year

Environmental Compliance Metric FY2017 FY2018 FY2019 Target FY2019

Sewer Nitrogen (N) Tons – FY basis 527 (TMDL of 683*) 550 (TMDL of 683*) 616 396

Sewer SSOs – US Waters (per 100 miles of pipe) 1.15 0.68 0.58 0.70

46 47

67

34

27

34

72

49 50

23

0

10

20

30

40

50

60

70

80

FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

88

74 70 69 67 69 67 68

76

64

0

10

20

30

40

50

60

70

80

90

100

FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019

Min

ute

s Priority Tickets: Customer Reponses

Water Distribution System Average Minutes Water

Pressure Less than 30 psi

Customers Affected by Unplanned Outages

(% of customers)


Unplanned Water Outages • Percentage of customers

affected by unplanned outages • Large water main break in

August caused FY2019 goal of 2% not to be met

Water Pressure (minutes per

month < 30 psi) • Measured by ~300 pressure

monitoring stations in the distribution system

• Pressure must be greater than 30 psi, and is expected to be greater than 50 psi

• Regulatory requirement is minimum 20 psi

Customer Response Time • Average time from a customer

call to the ticket completion or transfer to a field crew for a more extensive repair

• Exceeded FY2019 goal of 65 minutes

1.79%

1.17% 1.46%

1.73%

3.85%

1.43%

4.79%

2.66%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY20190

10

20

30

40

50

60

70

80

90

2013 2014 2015 2016 2017 2018 2019

Ave

rag

e M

inu

tes

pe

r M

on

th

73

Water & Wastewater System Reliability & Resiliency Metrics

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47


Framework to Resiliency

In response to the

challenges JEA

experienced during

Hurricanes Matthew and

Irma, the resiliency

program was developed

to better understand

system vulnerabilities and

proactively improve

system reliability and

operational continuity of

JEA’s Water, Wastewater,

Reclaimed Water and

Chilled Water Systems

Signed contract with CH2M/Jacobs in 2018 to provide Resiliency Assessment, Program

Management and Engineering Services

• Identify system vulnerabilities and provide recommendations to address

• New Standards will be developed based on findings from assessments as well as

projected future climate conditions

Collaborating with JEA’s Electric System Analysis Group to proactively evaluate power

quality of electric circuits serving JEA’s critical Class III and IV pump stations

• Identify dual electric feed opportunities at specific pump stations

• Identify improvements on JEA’s electrical grid

Initiated system hardening projects such as converting primary and secondary electric

lines serving critical pump stations from overhead to underground

• At the end of FY18, 26 secondary electric lines and 19 primary electric lines were

converted from overhead to underground

Having backup generation is essential to maintaining operational continuity especially

during extreme weather conditions

• JEA has purchased multiple types of assets for backup power

• JEA has also entered into a lease agreement to rent backup power during hurricane

season

• 93% of Wastewater peak hourly flow is covered by back up

74

Water & Wastewater Reliability Improvements | Resiliency Program

Fixed Generators Fixed Pumps Portable Pumps and

Generators Dual Electrical Feed

347 110 274 7

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47


Wastewater System Improvements | Resiliency Program

Loss of line power is a major contributor to sewer overflows at pump station

• Locations of Loss of Power varies based on the storm characteristics

• Loss of power is typically tree canopy related

JEA has mitigated the potential for loss of power through:

• Aggressive tree mitigation

• Undergrounding services at heavily wooded sites

• Additional back up power added to pump stations

• Prioritization of electrical restoration with Energy

• Raised standards to require 3 hour hold time or back up power

• Flood inundation study completed and used for new designs

Results: reduction of SSO volume from Hurricane Matthew to Hurricane Irma

• Normal treatment flow is 75 MGD

• Hurricane Matthew flow was 112.5 MGD

• Hurricane Irma flow was 131 MGD

Due to aggressive improvements after Hurricane Matthew, less impact was felt by Hurricane Irma

• Loss of power down by 55 stations (4%)

• SSO’s down by 7 stations (13%)

• Sewer overflow volume down by 9.2 million gallons

Storm Resiliency Improvements - Pump Stations

75

11.5

112.5

Volume of SSO (Million Gal) Flow Processed MGD

2.3

131.3

Volume of SSO (Million Gal) Flow Processed MGD

Hurricane Matthew: 112

MGD Flow Processed

Hurricane Irma: 131 MGD Flow

Processed

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Notes:


Subsection C


PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Failing septic systems – negative environmental impact

Overall there are over 65,000 septic systems

• JEA and its engineering partner are studying solutions which

reduce costs of replacement:

– Study will identify specific solutions for the 22,000 priority

locations; solutions for collection may include gravity, low

pressure system and vacuum or elimination of collection

utilizing on-site treatment systems

– Solutions will then inform decisions for replacement of the

remaining 43,000 units

– Study includes:

o Research of available systems

oConsiders alternatives such as decentralized treatment

systems

o Planning for potable water upgrades as needed

o Pilot of viable systems as required

Overall there are over 65,000 septic systems, the replacement of these systems is estimated to cost $1.3Bn (1), if

innovative solutions are found

• JEA is developing innovative solutions to address failing septic systems in Duval County and Northeast Florida

• Replacing 22,000 priority septic tanks with traditional gravity is estimated to cost ~$708MM over 30 years


Wastewater System Improvements | Septic Tank Phase Out (STPO) Initiatives

Note: 1. From FY 2020 – FY 2030, the Respondent financial model includes $440MM of total capital expenditure in the “Management Case” and “Scenario A”, of which, $440MM corresponds to Management Case Initiatives

S

C E

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47


Significant Investment Opportunities in Wastewater Treatment

Population growth and future development elevate the need for additional wastewater treatment investments

Greenland WRF

• In the early 2020s, the Greenland WRF will be constructed to provide service to the Southeast region of Jacksonville

– JEA is investing over $80MM dollars in the 6.0 MGD advanced wastewater treatment plant

Northwest Jacksonville WRF

• Later in the decade, significant development (11,000 connections based on current developer indications) will drive the need for a new WRF

– JEA is projecting costs at over $290 – $325MM dollars for the wastewater, purified water and reclaimed water facility (1)

Overview

JAX Airport

I-95

I-295

Site

Future Development

Future Development

New wastewater treatment facilities unlock regional growth potential in a sustainable way

78

Note: 1. From FY 2020 – FY 2030, the Respondent financial model includes $180MM of total capital expenditure in the “Management Case” and “Scenario A” for upgrades to Northwest and other facility systems

S

C E

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Notes:


Subsection D


PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Notes: 1. Approximated connection figures 2. Estimated connections at build out


Water & Wastewater System Opportunities

Target Seller Announcement

Date # of Water

Connections (1) # of wastewater Connections (1)

Transaction Value ($MM)

Gate Maritime Gate Maritime Properties, Inc. 6/13/2000 NA NA 1.0

Regency Utilities Regency Utilities Inc. 4/10/2001 NA NA 7.7

United Water United Water Florida LLC 12/28/2001 37,000 37,000 219.0

Florida Water Florida Water Services Corporation 10/15/2003 5,800 5,300 25.0

Nocatee Nocatee Utility Corporation 12/6/2004 17,500 17,500 2.3

St. Joe St. Joe Utilities Company 12/22/2004 8,600 8,600 2.3

Total 68,900 68,400 257.2

JEA has the historically-proven ability to expand its footprint through strategic acquisitions of nearby utilities

(2)

(2)

(2)

(2)

Since 2000, JEA has acquired numerous local utilities in the greater Jacksonville area. Our charter has limited us in the past but we have a history of acquiring and assimilating utilities

80

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

81 WATER SYSTEM OVERVIEW

Water/wastewater utilities face increasing pressures, but have limited ability to respond…

▪ Florida water utilities will require $10Bn through 2030 to replace aging infrastructure

▪ US water bills increased ~6% since 2010, while average consumption has decreased

▪ Water / wastewater regulations increased 40% from 2010 to 2017. FL lawmakers are considering new environmental standards, but few utilities have the expertise to meet these regulations

What it takes for JEA to be successful

A deep understanding of the water system, regulations and customer relationships

A trusting relationship with Florida municipalities and utilities to support smooth acquisition and integration

Operational expertise in managing regional capital projects, including implementing emerging technologies

A partner to infuse capital for water

acquisition, integration and system improvements, given 30x P/E multiples (1)

How JEA will capture value

JEA will acquire and transform nearby water utilities along major Florida transit routes, becoming a roll-up platform for water services by doing the following:

▪ Bring acquired utilities up to top performer status

▪ Optimize back office services

▪ Enhance systems through efficient Capex deployment, maintaining affordability across a wide customer base

…a high performer with operational excellence and access to capital can radically transform FL water/Wastewater utilities

▪ JEA is a top performing water/wastewater utility that has maintained high quality operations while keeping rates below Florida’s mean – The average water utility’s O&M/customer

spend is 4x higher than JEA’s and wastewater O&M/customer spend is 5% higher

▪ JEA is a leader in environmental water quality and can help Northeast Florida utilities meet

and exceed environmental standards

JEA has or could build this capability internally

JEA would likely need to partner to build this capability

By the

numbers –

expansion potential

Up to 2.95MM new customer

accounts added by acquiring

utilities in Florida

$930MM run-rate capex

investment opportunity

through 2030 (3)

$1,135MM of potential Opex

savings from moving these

utilities to JEA’s efficiency (2)

Notes: 1. In 2018, water utilities were trading at P/E multiples of ~30x, higher than electric (~19x) and gas (~21x) utilities 2. Assumes Northeast Florida utilities' cost profiles resemble the national average, as benchmarked by AWWA, and that JEA can improve O&M/customer spend to JEA's levels by 2030 3. Assumes JEA will invest Capex at 50% of the rate of its core business (including baseline Capex spend and incremental Strategic Capital investments in water)

Source: GWI, Circle of Blue, AWWA State of Water Industry 2019, Michigan State University, EPA, Market data, BAML analyst reports, press search, JEA Invitation to Negotiate

Overview

Water & Wastewater System Opportunities (cont’d)

JEA can grow its water footprint via acquisition, using its top quartile operational performance and capabilities

to provide more efficient, affordable services across Florida

S

C E

82

Section 5

Financial Overview

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

FINANCIAL OVERVIEW

• FTI completed an analysis of JEA’s Electric System balance sheet and the adjustments that would be made to each pro forma balance sheet account for purposes of the Respondent Financial Model

• For each account, FTI determined whether a balance would transfer to the NewCo upon completion of the transaction

− If it would, no adjustment was made and the JEA current balance serves as an input to the pro formas in the Respondent Financial Model

− In some cases, assets or liabilities would be eliminated/liquidated or the account balance would remain with JEA following closing of the transaction. In those instances, an adjustment was made so that the starting point of the Respondent Financial Model would accurately reflect the assets and liabilities that transferred with JEA upon closing the transaction

Summary Overview of FTI’s Analysis of Rate Base for Electric and Water and Wastewater Systems

Beginning September 30, 2019 Electric System Utility Plant 2,684

(+) Capex 224

(-) Accounting Depreciation (231)

(+) Net Working Capital & Other Net Regulatory Assets 441

(+/-) Accumulated Deferred Tax Assets / (Liabilities) 18

September 30, 2020 Rate Base 3,136

Electric System Starting Rate Base Build Water System Starting Rate Base Build

Beginning September 30, 2019 Water System Utility Plant 2,476

(+) Capex 237

(-) Accounting Depreciation (162)

(+) Net Working Capital & Other Net Regulatory Assets 89

(+/-) Accumulated Deferred Tax Assets / (Liabilities) 15

September 30, 2020 Rate Base 2,655

($MM) ($MM)

Elimination of cash and investment balances currently on hand to pay down debt or other purposes by JEA –

these assets, some of which have offsetting liability accounts, will be liquidated and used to defease debt or for some other purpose and, as such, will not be included in the assets of the NewCo

Assets that will be extinguished because JEA’s pension obligations will be extinguished at the closing of the transaction. As a condition of the sale, JEA is meeting all outstanding pension obligations for its current employees. As such, these accounts are eliminated and are not transferred to the NewCo

Balance

Sheet

Adjustments

Miscellaneous adjustments, which will net against either debt or net position (equity) accounts that define total capitalization post adjustments

Note: 1. See JEA ITN Regulatory Report for additional detail and fulsome analysis

83

Rate Base Overview

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

$0

$50

$100

$150

$200

$ /

Mo

nth

Utility Charges Gross Receipts Tax Public Service Tax Franchise Fee

Rate Base Overview | Bill Affordability

Florida Utilities Monthly Residential Electric Bill Comparison (1)(2)

FINANCIAL OVERVIEW 84

Notes: 1. Consumption @ 1,000 kWh 2. Residential Rates as of September 2019

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Rate Base Overview | Bill Affordability

Florida Utilities Monthly Residential Water & Wastewater Bill Comparison (1)(2)


Notes: 1. Residential Service with a 5/8" meter and 6 kgals of Consumption 2. Residential Rates as of September 2019

$0

$20

$40

$60

$80

$100

$120

Utility Charges Public Service Tax Franchise Fee

$ /

Mo

nth

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Management Case Under Scenario A

Source: JEA ITN Respondent Financial Model


Electric System Sales Forecast

Electric System Sales Forecast ($MM)

863

975 918

867

387

366

333

318

1,273

1,365

1,275

1,209

0

300

600

900

1,200

1,500

FY2020 FY2021 FY2022 FY2023

Base Revenue Fuel & purchased power Other revenue

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

FINANCIAL OVERVIEW


Water & Wastewater System Sales Forecast

249 261 269 277

214 226

235 245

470

497 514

532

0

120

240

360

480

600

FY2020 FY2021 FY2022 FY2023

Water Sewer & Reclaim Other revenue

87


Water & Wastewater System Sales Forecast ($MM)

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Rate Base Projections ($MM)

Rate Base Projections

FINANCIAL OVERVIEW

2,684

3,136 3,151 3,112 3,204 3,443 3,559

3,777 3,964 4,127 4,269 4,160

2,476

2,655 2,738 2,820 2,863

2,923 2,999

3,070

3,135 3,197

3,249 3,298

5,160

5,791 5,889 5,932

6,068

6,366 6,557

6,847

7,099

7,323 7,518 7,458

0

2,000

4,000

6,000

8,000

2019A FY2020 FY2021 FY2022 FY2023 FY2024 FY2025 FY2026 FY2027 FY2028 FY2029 FY2030

Electric System Water and Wastewater System

88


PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Capital Expenditure Projections ($MM)

Capital Expenditures Projections

FINANCIAL OVERVIEW

224 269

235

371

532

421

534 514 513 512

274

237

271

277

242

266

289

286 286 293 293

300

461

540

512

614

798

709

820 799 806 805

574

0

250

500

750

1,000


Total Electric System Total Water and Wastewater System

89


PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Total Projected Capex ($MM) 2020 – 2024

Total Projected Capex ($MM)

2025 – 2030

Electric System | Planned Capital Expenditures

FINANCIAL OVERVIEW

56 46 47

176

302

170

291 291 291 291

52

118 171

142

144

178

199

197 176 176 175

175

49

52

46

51

51

51

47 47 47 47

47

59

62

65

68 70 72 74

80

224

287 266

431

594

486

602 584 586 587

353

0

175

350

525

700


Forecasted Spend ($MM) (1)(2) ~$4.4Bn in CapEx forecasted between 2020 and 2030

Source: Company Projections

Notes: 1. Excludes Complete and Cancelled Projects and any non-regulated CapEx associated Community Improvement Case Investment 2. $770MM of the total $1,852MM Electric T&D CapEx or 42% and $151MM of the total $536MM Other CapEx or 28% over years 2020-2030 is associated with Management Initiatives

Electric Generation Electric T&D Other

Electric

Generation

35%

Electric T&D

42%

Other

14%

Electric

Generation

43%

Electric T&D

34%

Other

9%

Community Improvement

Case Investments


Case Investments

9%


Case Investments

13%

Management

Case CapEx 224 269 235 371 532 421 534 514 513 512 274

Total CapEx 224 287 266 431 594 486 602 584 586 587 353

90

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Electric System

generation capex

Electric System

substation capex

Electric System

distribution capex

Electric System

transmission capex

Other capex

Reference to base 10-year

forecast, row Item in financial model

New – Distribution Row 14, Tab “Energy”

Meters Row 13, Tab “Energy”

R&R – Distribution Row 16, Tab “Energy”

New Development/Additions Row 15, Tab “Energy”

Miscellaneous Row 23, Tab “Energy”

R&R – Transmission Row 19, Tab “Energy”

New – Transmission Row 18, Tab “Energy”

Facilities and Physical Security Row 21, Tab “Energy”

Fleet Row 22, Tab “Energy”

Technology Services Row 24, Tab “Energy”

New - Generation Row 5, Tab “Energy” Expanded generation

capacity capex Generation Fleet of the Future Strategic capital

R&R – Generation Row 11, Tab “Energy”

Gas Line Upgrades Row 10, Tab “Energy”

R&R – Substation Row 8, Tab “Energy”

New – Substation

Reference to CIP, page

91

85, 96

25, 81, 91

91

77, 78, 79

81

NA

NA

87, 93, 94, 95

77, 78, 80

10, 64

21, 64, 78, 79, 93

91, 94

NA

91

91 Row 7, Tab “Energy”


Where Base Electric System Capex Is Described CIP and Model

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Total Projected Capex ($MM) 2020 – 2024

Total Projected Capex ($MM)

2025 – 2030

FINANCIAL OVERVIEW

50 64

49 40 54

110 106 125 125 125 125

166

186 204

180 176

152 153 134 137 137 144

20

21 24

23

36

26 26 26 31 31 31

237

271 277

242

266

289 286 286 293 293

300

0

100

200

300

400


Forecasted Spend ($MM) (1)(2)

~$3.0Bn in CapEx forecasted between 2020 and 2030

Source: Company Projections

Notes: 1. Excludes Complete or Cancelled Projects 2. $410MM of the total $972MM Water CapEx or 42% and $440MM of the total $1,770MM Wastewater CapEx or 25% over years 2020-2030 is associated with Management Initiatives

Water Wastewater Other

Water

20%

Wastewater

71%

Other

10%

Water

41%

Wastewater

49%

Other

10%

Management

Case CapEx 237 271 277 242 266 289 286 286 293 293 300

92

Water & Wastewater Systems | Planned Capital Expenditures

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Water Distribution

Water Treatment

Wastewater Treatment

Sewer Collection

Sewage Pump Stations

Reclaim Water

Distribution

Water Other Capital

Projects

Item in financial model Reference to base 10-year

forecast, row

WTP - Expansions Row 33, Tab “Water”

R&R and New - Wells & Storage Tanks Row 32, Tab “Water”

R&R - WRF Plants Row 17, Tab “Water”

New - WRF Plants Row 16, Tab “Water”

WRF - Large Improvements/Upgrades Row 19, Tab “Water”

New - Water Lines Row 22, Tab “Water”

WTP - New Row 34, Tab “Water”

Purified and Alternative Water Options Row 30, Tab “Water”

Meters Row 21, Tab “Water”

R&R - Water Lines Row 23, Tab “Water”

R&R - WTPs Row 31, Tab “Water”

New - Sewer Lines Row 13, Tab “Water”

R&R - Sewer Lines Row 14, Tab “Water”

R&R - Pump/Lift Stations Row 10, Tab “Water”

New - Pump/Lift Stations Row 9, Tab “Water”

Resiliency Row 11, Tab “Water”

Plant - Upgrades and Expansions for Reclaim Row 6, Tab “Water”

New - Reclaim Lines Row 5, Tab “Water”

R&R - Reclaim Lines Row 7, Tab “Water”

Fleet Row 26, Tab “Water”

Miscellaneous Row 27, Tab “Water”

Facilities and Physical Security Row 25, Tab “Water”

Technology Services Row 28, Tab “Water”

WRF – Expansions Row 18, Tab “Water”

Reference to CIP,

page

91

91

90, 91

35, 90, 91

90, 91

NA

91

33, 34, 90, 91, 140

85

91

35, 82, 91

NA

91

91

91

91

35

NA

91

82, 83

82, 83

NA

82, 83, 91

90, 91


Where Base Water System Capex Is Described CIP and Model

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

FINANCIAL OVERVIEW



295

267 273

265

0

50

100

150

200

250

300

FY2020 FY2021 FY2022 FY2023

Non-Fuel O&M Net of Strategic / Growth Initiatives

94

Electric System O&M Forecast ($MM)

Electric System O&M Forecast

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

FINANCIAL OVERVIEW


Water & Wastewater System O&M Forecast

183 176 176 177

0

40

80

120

160

200

FY2020 FY2021 FY2022 FY2023

O&M Net of Management Strategic / Growth Initiatives

95


Water & Wastewater System O&M Forecast ($MM)

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Notes:


Subsection A

Risk Management

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

FINANCIAL OVERVIEW

Risk Management

Overview

JEA’s goal is to minimize risk exposures to financial loss from bodily injury and/or property damage resulting from JEA’s operations in a manner consistent with JEA’s core values, policies and procedures. To achieve this goal JEA is responsible for providing protection for corporate assets through the application of risk management techniques and providing services such as:

• Negotiation with insurance carriers, the procurement of JEA/SJRPP’s property, liability and workers’ compensation insurance, including management of self-insurance programs

• Manage public liability claims and litigation involving JEA/SJRPP for bodily injury and property damage to others

• Manage JEA property damage subrogation for reimbursement by third parties who damage JEA’s assets

• Review of contracts, agreements and leases as a member of JEA’s Solicitation Committee

• JEA’s representative for FEMA to obtain reimbursement of disaster related damage to JEA’s assets

• Work with JEA’s facility managers to comply with our property insurance carrier’s engineering recommendations for loss prevention to JEA’s assets

• Communicate effectively with all JEA business segments to minimize overall company exposure and reputational risk

Identify & Analyze

Exposures

Examine Risk Management Techniques

Select Risk Management

Technique

Implement Techniques

Monitor Results

Risk

Management

97

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47


Post Remediation Closure Liabilities & Costs

$2,538,727

$15,802,661

$6,769,179

$1,033,797

$2,902,077

NGS KGS SJRPP Other

Remediation

Sites

SGS

Estimated environmental liabilities and post-closure costs

at the various JEA sites are $26.1MM • Of the approximate $26.1MM, approximately $15.8MM

is associated with the Kennedy Generating Station to address remediation of contamination from a wood preserving operation

• Approximately $6.8MM for the St. Johns River Power Park for Area B closure and post-closure actions

• Smaller amounts of costs (a total of $1.0MM) are allocated to various other sites

• Southside Generating Station not included in the $26.1MM total, however exists as a backstop if current developer defaults

• Future NGS demolition and remediation costs not included – Northside Generating Station is shown in the CIP to be

decommissioned between the 2025 and 2030 timeframe o While total decommissioning costs have not been

determined, Unit 3 is 1979 vintage

o NGS Units 1 and 2 were repowered in 2002/2003 but Turbine components are also early vintage, and contain asbestos, lead paint and other construction materials

o All three units prior to repowering were oil units

Environmental Liabilities & Post Closure Costs

Post remediation & closure opportunities include potential sale and reuse of industrial sites/facilities

99

Section 6

Customer Engagement

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Notes:

CUSTOMER ENGAGEMENT 100

Subsection A

Overview

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

JEA Residential Customer Segmentation


1- On The Move

2- Cost Conscious

Needy

3- Erudite Splendor

4- Path to Prosperity

5- Set it and Forget it

6- Digital in Debt

7- Boomer Contentment

8- Blue Sustenance

• Young • Single • Renters • Low Incomes • Multi-family

homes • Electric only

consumption • Many

customers < 3 years

• Low consumption

• Pay online • High % of low

income

• High number of pre-pay

• Young • Single • Small homes • Older homes • Low incomes • Water &

electric consumption

• Many customers < 3 years

• Medium consumption

• Collections and contact frequency

• Pay online • High % of low

income assistance

• High % of pools • Majority single

family homes • Large homes • Mostly

homeowners • Mostly married • High

proportion of college degrees and professionals

• Higher incomes • Mostly longer

term residents • High usage • Mostly pay by

check • Median age

approaching 50

• Mostly homeowners

• Large % of water only customers

• Medium property size

• Large % with college degree and professionals

• Higher income • Good credit • Low

maintenance • High Usage • Middle aged • Most pay by

check

• Second highest % of pools

• Majority single family homes

• Mostly homeowners

• Medium property size

• Good credit • Middle aged • Mostly EZ pay • Highest % on

Ebill • Low

maintenance • Medium usage

• Youngest customers

• Newer homes • Digitally

inclined • Mostly single

family homes • Higher % on

Ebill • Majority pay

online • High

collections activity but low maintenance otherwise

• Highest proportion of retirees

• Old homes • High length of

residence • Good credit • Highest age

group • High outage

related effort but medium maintenance

• Mostly pay by check

• >50% electric customers only

• More renters • High blue

collar population

• Low to mid income

• High % of low income assistance

• Longer term of residence

• Medium maintenance

15% 13% 13% 6% 7% 16% 16% 15%

40% of our residential customers are considered low-income or ALICE (Asset-Limited, Income-Constrained and

Employed)

The JEA Customer

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Bill Growth Will Be Outpaced By Wage Growth, Reducing Bills As An Overall Share Of Wallet

Notes: 1. EIA Form 861; ABB Energy Velocity 2 US census, household income 2017 2. Assumes median income CAGR of 2.7%, consistent with Duval County CAGR from 2010-2020 3. Share of wallet defined as average annual electricity bill (EIA Form 861) over median household income (census.gov)


Source: Moody’s Analytics, Census.gov, EIA, Bureau of Economic Analysis, company website

$1,455

$1,869

+28%

$52,062

$80,0004

2017 2030 projections

+54%

Avg. electric bill (1), 2017, 2030 projections

Increased investment in the electric system grows electric bills from an average of $1.4K in 2017 to $1.9K in 2030 …

Median household income (2), 2017, 2030 projections

… but median incomes in Duval County are expected to grow at a faster pace of ~50%...2

… resulting in lower overall share of wallet in 2030 by .5 percentage points

Share of wallet (3), electricity spend as share of median income, 2017, 2030 projections

3.3

3.3

3.2

3.0

3.0

2.9

2.8

2.8

2.8

2.7

2.5

2.3

2.3

Duke Energy FL

Southeast

Alabama

South Carolina

TECO

Florida

Gulf Power

JEA

Georgia

FPL

Orlando

JEA forecasted

US median -16%

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Customer Engagement

Customer Satisfaction: From Worst to First


• In 2012 JEA’s JD Powers customer satisfaction scores were in the lowest quartiles

• JEA took action to respond and hired their first Chief Customer Officer

• JEA embarked on a company wide effort to shift their focus to a customer centered focus

– Customer service is not just the responsibility of the Customer Engagement team but of the entire JEA team as whole

– The entire company is required to participate in annual customer service training

• In 2019, JEA reach its highest customer satisfaction score

Customer Engagement Team

• The Customer Engagement team is responsible for all customer facing or engaging activities. These activities include:

− Customer Solutions & Market Development

− Customer & Utility Analytics

− Customer Revenue Services

− Customer Field & Meter Services

− Residential & Commercial Customer Experience Centers

− Internal & External Communication

− Ambassador Program

− Website Management

− Separate training and workforce management dedicated to customer advisors

− Community Outreach

FY2019 Customer Satisfaction Goal

Achieve 1st Quartile Ranking for JD Power Customer

Satisfaction Index for both Residential

and Business Studies

Residential (R)

Business (B)

FY2019 Residential # of companies ranked: 142 FY2019 Business # of companies ranked: 87 1Q = 1st quartile 2Q = 2nd quartile 3Q = 3rd quartile 4Q = 4th quartile

FY2017 FY2018 Per 1 Per 2 Per 3 Per 4 FY2019

1Q 747 2Q 737 2Q 750 1Q 765 1Q 754 2Q 754 1Q 756

FY2017 FY2018 Per 1 Per 2 FY2019

1Q 779 1Q 802 3Q 760 1Q 804 2Q 782

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

647

692 703

747 737

756

705

754

780 791 784

804

CUSTOMER ENGAGEMENT

JEA Quartile Industry

3 1 2 1 2 1 1 1 1 1 1 1

JEA Rank

Industry 75/138 30/140 37/137 21/138 44/138 29/142 14/87 1/86 12/86 13/86 14/88 20/87

JEA Rank

Florida 7/11 5/11 6/11 5/11 6/11 4/12 2/6 1/6 3/6 2/5 2/5 2/5

104

Customer Satisfaction Index

Note: 1. 2019 Residential W2 YTD

782 FY2019

Residential Business

2014 2015 2016 2017 2018 2019 (1)

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Notes:


Subsection B


PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

CUSTOMER ENGAGEMENT

An automatic bill payment method using the

customer’s checking or savings account

JEA Auto Pay Program

JEA’s Customer Assistance Program partners with

45-60 non profit agencies located throughout

Northeast Florida on behalf of low-income

families and households to provide temporary

utility bill assistance

An electronic billing method that avoids the cost

and resources associated with paper billing

JEA eBill Program

A stored value gift card that can be used to pay

JEA bills

JEA Gift Card Program

A levelized billing program that takes the volatility

out of seasonal billing by generating a customer's

monthly payment using a rolling 12-month

average

JEA MyBudget Program

A prepay service option that allows a customer

to avoid deposit, reconnect and late fees

JEA MyWay Program

1

2

3

4

5

6

We strive to create modern, intuitive, user-friendly

experiences and provide utility programs to our

customers through various billing and payment options

Convenient Customer Programs

Payment Methods JEA is adding more places and ways for our customers

to make their payments close to home, work or school

• Payments can be made online at JEA.com or at any

of the JEA authorized payment-only locations below

106

Payment Methods & Programs

JEA Customer Assistance Program

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

CUSTOMER ENGAGEMENT

AutoPay • The program grew organically

by 331 net new Customers in October (0.7% over FY2019) resulting in a total enrollment of 45,323 Participants

eBill • The program grew organically

by 1,313 net new Customers in October (1.0% over FY2019) resulting in a total enrollment of 133,629 Participants

MyWay • The program grew organically

by 430 net new Customers in October (1.8% over FY2019) resulting in a total enrollment of 24,502 Participants

MyBudget • The program shrunk

organically by 80 net Customers in October (-0.4% over FY2019) resulting in a total enrollment of 19,851 Participants

FY2020 AutoPay Enrollments FY2020 eBill Enrollment

FY2020 MyWay Enrollment FY2020 MyBudget Enrollment

107

Payment Methods & Programs

45,000

45,500

46,000

46,500

47,000

47,500

48,000

48,500

Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep

Actual Enrollments

132,000

134,000

136,000

138,000

140,000

142,000

144,000

146,000

148,000

150,000

152,000


Actual Enrollments

24,000

24,500

25,000

25,500

26,000

26,500

27,000

27,500

28,000


Actual Enrollments

18,800

19,000

19,200

19,400

19,600

19,800

20,000


Actual Enrollments

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47


Volunteer Program More than 600 JEA employees volunteered 7,183 hours in FY2018/2019 to

provide energy and time assisting more than 100 charitable organizations

across our service territory

Ambassador Program More than 300 JEA employees conducted or attended 724 activities over

the course of FY2018/2019 to educate our customer base on programs,

services and conservation

Educational Programs Through various programs developed and implemented by JEA

employees for Duval Public School System schools, students and teachers

from 1st through 12th grade have access to a variety of educational

resources, activities and classes throughout the school year

JEA Employee Giving Campaigns More than $400,000 has been donated by JEA employees in

FY2018/2019 towards the United Way and Community Health Charities

JEA has become an integral asset of the northeast Florida

community, providing volunteer, educational and financial

assistance to various charities and community partners to improve

the lives of those we serve

JEA’s Community Impact Initiatives

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

109 CUSTOMER ENGAGEMENT

Pilot Sample Design

Rate Only Technology

Low Income Phase 2 (1)

Dual Flex Pricing Sample 828 225 700 1,000

Daily Flex Pricing Sample 827 225 700 1,000

Total Treatment Size 3,505 2,000

Control Size 10,000 10,000 TBD

Total Control Size 20,000 TBD

Cloud

4G LTE

Note: 1. Purpose is to backfill attrition, trial messaging and/or other Customer support offerings 2. Continue to charge a Fuel Cost, Environmental Charge and Basic Monthly Charge, as well as fees and taxes

• Initial work began on the Residential Demand Rate Pilot in 2014 with

116 customer and employees

• Additional focus groups and testing confirmed that demand pricing

is less impacted by weather and more stable than kWh

– JEA also learned that customers perceive more and longer

demand intervals to be fairer and enjoy the opportunity to save by

avoiding peak periods and the choice it offers

• JEA’s work in the field includes chairing a Residential Demand and

Time of Use working group that includes 30 individuals representing

15 IOUs, municipal utilities and cooperative utilities to discuss lessons

learned and benchmarking opportunities

Pilot Overview

Dual Flex Pricing – Two (2) Demand Charges (2):

• Highest demand during peak hours for the month (Peak)

– April - October (Summer): Monday - Friday, 12 p.m. - 7 p.m.

– November - March (Winter): Monday - Friday, 6 a.m. - 9 a.m.

• Highest overall hourly demand for the month (Anytime Hours)

Daily Flex Pricing – One (1) Demand Charges (2):

• Average of the highest hourly demands for each day for the month

Pilot Design

Becoming a Platform for Customer Choice | Residential Demand Rate Pilot

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

2-Way Meters = Better Data

Source: JEA Board of Directors Meeting- May 28, 2019


One to Two

Upgrading 1-way meters to current technology of 2-way meters allows JEA to improve visibility

of outages on a customized, individual basis

Progress

We have converted approximately 78% of all electric meters and are on track to achieve 100% by the spring of 2020

Outcome

In addition to improved outage information, the new technology meters support:

• Pre-paid service

• Remote connect/disconnect

• Outage & abnormal voltage/tampering reporting

• Demand rate (future)

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

CUSTOMER ENGAGEMENT

Customer Home Energy

Management Tool Pilot

• JEA is in the midst of conducting research and development into the enabling technology that would be necessary to support the customer in a demand pricing scenario

• A 250 customer and employee pilot is testing a state-of- the art Customer Home

Energy Management (“HEM”) tool • The HEM technology tool includes:

– Cellular gateway that provides 1 minute data off the meter

– A JEA app that will monitor energy usage and provide threshold alerts

– Appliance (HVAC and Water Heater) control

– Fun gamification that encourages

education thru entertainment

111

Becoming a Platform for Customer Choice | Enabling Technology

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Becoming a Platform for Customer Choice | Electrification

112 CUSTOMER ENGAGEMENT

“Electrification is the shift from any non-electric source of

energy to electricity at the point of final consumption.”

-National Renewable Energy Lab

What is electrification?

Beneficial Electrification requires that it be cost-effective for JEA, good for all customers (whether they participate in the program or not), and good or neutral for the environment”

-ICF

How is it beneficial?

On-Road Program: Incentives On New Electric Vehicles Objectives • Strategic partnership with Transportation Planning Organization

(TPO) and Drive Electric Florida • EV Educational Forums • Charging Infrastructures Support • Trusted Advisor • Promotional outreach

New Electric Vehicle JEA Incentive

Battery size less than 15kWh $500

Battery size of 15kWh or higher $1,500

Non-Road Electro-Technology (NRE) Program: Conversion of

Commercial and Industrial Diesel/Propane Equipment to Electric Objectives • Direct business to business customer analysis and sales • Marketing • Vendor training • Consultation with JEA customers • Technical support • Financial analysis • QA/QC inspections

Electro-technology JEA Incentive

Forklifts $300

Airport Ground Support Equipment $100-$600

Truck Refrigeration Units $200

Heavy-Duty Truck Stop $200

Cranes $15,000-$75,000

Golf Carts $50

Welders $500

There exists an opportunity to increase the scale and scope of both the on-road and non-road program. By adding additional technologies, program design elements, and budget, JEA may be able to:

• Significantly increase the revenue and values from the programs

• Put downward pressure on rates

• Provide a more flexible and efficient JEA load shape

• Significantly reduce JEA’s (and its customers’) environmental footprint

JEA’s Electrification Future

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Notes:


Subsection C

Strategic Capital and Core Growth Opportunities

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

TBU with Exelon-

like call-outs

NOTIFICATION

Estimated time

remaining:

45 minutes

EV charging costs are

minimized through time-of-use rates, which

incentivize charging during periods of excess

generation of intermittent renewables (e.g.,

overnight wind; excess solar)

Grid operators leverage DERs (e.g.

distributed solar, demand response) in place of peakers to balance

system load, reducing overall grid costs borne by customers while

compensating DER owners

Microgrids ensure critical

load centers (e.g. City Hall,

hospitals) maintain power

during disruptions

Automated messages

proactively notify customers of grid outages and estimated

restoration times Jacksonville

residents enjoy access to clean,

electrified public bus systems

Availability of EV chargers at

public and commercial buildings enable customers

to seamlessly charge during their daily routines

Smart street poles with microcells and

environmental sensors support an array of new public services: public 5G WiFi,

gunshot detection, and smart parking

Incentives for

smart, energy efficient,

electrified equipment (e.g.,

water heaters, HVAC) help

customers achieve energy

goals


Community Benefits From ITN |Enabling Innovative Development and Improved Public Services

115

Section 7

IT and Compliance

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Notes:

IT AND COMPLIANCE 116

Subsection A

IT Overview

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Network & Server

Exchange • Exchange 2013 (moving to O365) • 4600+ Active Mailboxes • Native Journal

Storage & Eng

• HP 3PAR (2600+ TB) • HP StoreOnce • Oracle Exalogic & Exadata • HPE SimpliVity

Data Center • Primary (3670 sq ft) • Colo – Cat 5 Rated (w/3245 sq ft) • Office Space Backup (1310 sq ft)

Workspace

• Citrix Virtual Apps & Desktops • Citrix EdgeSight • Citrix StoreFront • VMware Site Recovery Manager • VMware VDI • VMware Workspace One

Trans & Access

• 1337 VLANs • 490 Switches • 291 LAN Locations • 3800+ Active Network Ports • 284 Access Points

Perimeter

• F5 Global & Local Traffic Manager • Palo Alto Firewall • Cisco ASA Firewall • Headend Cradle Point Wireless • NetMotion Mobility

Servers

• Vmware vSphere & vCenter • OS MS & Linux (RHEL & Oracle) • 579 MS Server & 187 Linux (60%+ Virtualized) • Cisco UCS & HPE


Where JEA is Today?

• JEA IT is responsible for IT Infrastructure,

Databases, Middle-tier, Compliance Assurance,

Applications and Information Security

• JEA follows IT Service Management (ITSM)

processes focused on aligning IT services with

JEA’s strategy, delivering customer value,

financial value, environmental value and

community impact value

• These values provide clarity and purpose for

which JEA measures the importance of the

services that it provide

• JEA has also adopted the COBIT framework to

enhance the metrics that it uses for operational

purposes to better align with the business and

establish meaningful measurements that can

both serve as a baseline and show value

• Furthermore, these practices are used to

demonstrate compliance and to measure

improvement

Strategic Breakthrough Objectives

• Modernize Customer and Employee Experience

• Stabilize and Protect Business Operations

• Instill a Digital Culture to Accelerate Innovation

and Growth

• Transform Information into Insights

• Strengthen Organization Vitality

JEA Information Technology

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

• JEA’s dark fiber network is strategically located throughout the Jacksonville metropolitan area and is a fully operational leasing business with existing infrastructure

• System includes a direct connection between JEA’s dark fiber network and international subsea fiber cables

• JEA owns and operates an ever-growing 675-mile fiber optic network of varied fiber strand counts in support of the Electric and Water/Wastewater utilities and also maintains 200 route miles of leased fiber, with ~130 total miles of revenue-generating routes and 8 revenue-generating fiber leases

• Portfolio of power transmission and telecommunication assets creates a platform for providing wireless co-location services

• Over 200,000 electric and street light poles can be leveraged for small cell, distributed antenna system, and/or other distributed telecommunication applications

• JEA currently has 40 standalone communication towers that could serve as macro sites

• JEA’s small cell collocation consists of 3 small cell leases with a backlog of 60 new sites and an additional 150 potential sites expected in the near future

• Rapid acceleration of consumer demand for broadband services is driving an urgent need for expansion of existing fiber and wireless infrastructure

• JEA leases network dark fiber (spare unused and unlit fiber) to telecommunication companies and enterprises

• Continued development of JEA communications infrastructure will facilitate the acceleration of next generation broadband services and the increased competitive position of Jacksonville as a global hub for communications

Overview

IT AND COMPLIANCE

Network & Server

Fiber

• 675+ Miles of Fiber • 450+ Electronics Equipment Devices • Transport for Corporate, AMI, Electric, Water/ Waste

Water & Radio Networks • Lite and Dark Fiber Services

Phone

• 2800+ Devices • 6000+ Phone Numbers • Voicemail • 911 • Security Gates & Intercoms

Contact Center

• 250 Agents • Self Service Applications • Workforce Management • Quality & Call Recording • Speech Analytics

Collab

• WebEx / MS Teams • SharePoint • Informacast • Digital Signage • Electronic White Boards • Poll Everywhere

FAN

• Automated Meter Infrastructure • Cradle Point Wireless • Vehicle Area Network / GPS • IoT / IIoT • WIFI

Cellular

• 1288 Cellular Devices (phones, MiFis, tablets) • 1000+ Wireless Routers • 54 Satellite Phones • IoT Devices (FCIs, Meters) • Mobile Command Center

Radio

• 1700 Motorola Radios • 2000 SCADA Radios • 40 Towers • Microwave Links

118

JEA Communications Infrastructure

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

IT AND COMPLIANCE

A Decade of Continuous Improvement

Information Technology

Operational Technology

Action Plans

119

Cybersecurity

0

10

20

30

40

50

60

70

12/31/2019 3/31/2020 6/30/2020 9/30/2020 >12 Months TBD

Complete/Deferred For Review Critical High Low

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47


Modernizing our workforce to operate at the speed of now

Business as usual is not an option. Digital age is the

catalyst of rising customer and business

expectations, requiring IT to shift from cost center

to value generator. In the age of digital business,

organizations must use a mix of IT and business

cost optimization for increased business

performance, to fund and prepare for digital

futures

• Gather baseline costs and benchmark

• Define clear metrics

• Identify optimization focus areas

• Identify optimization opportunities (quick wins)

• Identify opportunities to fund digital and innovation

• Identify business cost optimization opportunities

• Product and Service catalog

Organize & Analyze

• Execute quick wins

• Explore focus areas and strategic sourcing opportunities

• Strategic project portfolio management

• Rationalize Portfolio

• Expose total cost of ownership

• Establish cost optimization governance

• Align people, process, skills and tools to business lines for service delivery

Strategize & Execute

• Transition and change management

• Vendor and service delivery management

• Measure success not by cost and schedule but by value delivered

• Digitalize assets, data and business processes

• Optimize through automation and innovation

• Ongoing cost optimization discipline (not a one time exercise else costs will return)

Continuous Next

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2017 2018 2019 Industry

Spend Analysis

Run Grow Transform

Service Delivery Transformation

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47


Optimize Operations

Focused on exploring new technologies that benefit field operations and back office functions.

Capturing opportunities to augment our core utility technologies with mobility solutions, augmented

reality in GIS, enhanced IT/OT integration and cloud computing platforms to power transformation

Innovative Culture

Create and promote a culture where employees are encouraged and empowered to innovate

everyday. Create employee awareness and engagement to the opportunities, tools, processes and

teams to facilitate employee-driven innovation and development of new products and services

New Products & Services

Finding new solutions that solve problems, create loyalty, and improve customer experience – this is

the drive behind JEA innovation. Current focus areas include smart grid solutions, distributed energy

ecosystems, home energy management, telecommunications and advanced analytics

Process Improvement

Improving performance by using data driven and disciplined approaches to problem solving – and

educating the entire workforce on these methods. The JEA Blackbelt team utilizes tools, such as LEAN

and Six Sigma, that result in measurable improvements in cost and other corporate values

Four Pillars of Digital Innovation Program

IT Innovation

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Notes:


Subsection B

Compliance Overview

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

•Regulatory Compliance Critical Infrastructure Protection

Compliance

•Regulatory Compliance Electric Compliance

•Internal Audit

•Forensic Investigation Audit Services

•Enterprise Risk Management (“ERM”) Enterprise Risk Management

•Corporate Records

•Identity Access Management

•Physical Security of all JEA locations

Security

•Interface with COJ Ethics

•Hotline Monitoring

•Advise employees/management

Ethics


• The mission of the Compliance Group is to assist

JEA in achieving its financial, operational and

strategic goals, while maintaining compliance with

all associated laws and/or regulations

• The Compliance Group accomplishes this goal by

identifying institutional risks, performing audits,

reviews and investigations, augmenting

institutional compliance through effective

education and training programs, as well as,

fostering the values of knowledge, honesty,

integrity, respect, and professionalism

• The Compliance department is a very technical

and complex department dealing with

confidential and sensitive information

Compliance Processes

Overview

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Compliance

Compliance Philosophy Compliance not Defense

“It is the policy of JEA to proactively comply with all applicable FERC, FRCC [SERC], NERC and Florida PSC rules and regulations relating to electric system reliability, electric system transmission operations and electric market rules. The Board of JEA [has directed] the CEO to initiate and maintain a formal program which documents and ensures this compliance both in letter and in spirit”

• Follow Rules

• Meet regulatory schedules/deadlines

• Volunteer- draft standards (so we agree and support)

• Regulator Relationships

• Encourage business to ask for help and ask questions

IT AND COMPLIANCE

CIP Compliance

• CIP Compliance department is responsible for NERC CIP Regulatory standards which primarily focus on Cyber and Physical security of Bulk Electric System assets.

• CIP Compliance department supports the Compliance Oversight Committee activities which is responsible for many other federal and state regulations including FACTA (Red Flag), PCI, HIPAA

Electric Compliance

• Responsible for all NERC Operations and Planning Standards

• Registered as GO, GOP, DP, RP, PA, TO, TOP, BA

Audit History

• NERC Audits (2008, 2011, 2014 and 2017)

• CIP audits (2008, 2011, 2014 and 2017)

• O&P Audits (2008, 2011, 2014 and 2017)

Next Audits

• CIP March 2020

• O&P April 2020

124

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

3

2 6 7

5 3

1 1

3 2

1

3

3

1 1

0

2

4

6

8

10

12

QU

AN

TITY

Major Significant Moderate Nominal

IT AND COMPLIANCE

Audit Services

Forensic Audit & Investigators

• Hotline & Fraud Investigations/Audit

• Work closely with Office of Inspector General

• Assisted by JSO detective (Security) assistance

Audit Services

• Annual audit plan

• Action items list of findings/recommendation

• Generate “ad-hoc” reports, as needed using audit tools and systems (Auto-Audit, BI, ACL etc.)

• Audit Services identifies areas where improvement is needed, and helps make changes. This is done through:

– Operations Audits

– IT Audits

– Work with the business units, as requested, to identify and report transactions and possible exceptions

• Identify and monitor recommendations/findings

• Fraud or abuse is sent to the Forensics team

• Helps business establish controls for compliance

Open Action Plans By Issue Rating & VP

125

2015 JEA Quality Assurance Review. Honkamp, Kreguer, & CO

“JEA’s AS has demonstrated a commitment to quality, successful leadership practices, and maintaining an internal auditor’s mindset

for professionalism. Our assessment noted JEA’s AS has developed and implemented a methodology, a set of policies & procedures,

and built a team of experienced auditors based upon achieving the department’s mandate. Evaluation of the internal audit

processes and related audit work papers evidenced that JEA’s AS takes this role seriously and provides value to the organizat ion in

accordance with what is being requested of them.”

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

IT AND COMPLIANCE

Physical Security

Primary Responsibilities

• Security Operations

– Physical Security

– Surveillance

– Access Control Systems

– Fire prevention & Protection

– Visitor Control and Management

• Investigations

• Identity & Access Management (IAM)

– Password Management

– User Accounts

– Access Requests

– Security of the information systems

• Establish and maintain relationships with DHS, FBI, USCG, JSO etc.

• Records Compliance

– Records retention

– Public records requests

Scope

• 17 Security Professionals

• 125 Contract Security Personnel

• 680 physical structures (1,100 card readers)

– All Substations have card entry/access control

• 2,500 surveillance cameras

Mission

Our mission is to provide a detailed, and robust, protection

program for all personnel and assets employed by JEA. This

program will incorporate the highest quality of security officer

services, advanced security technologies, and fire protection

systems. In addition, our department will continuously develop

and enforce new policies and procedures to elevate the overall

JEA security posture to meet ever-developing security threats

and concerns while moderating impact to our core operations.

JEA Security is dedicated to ensuring all individuals are provided

a safe, and secure, working environment at JEA

Metrics FY2016 FY2017 FY2018 FY2019

Arrests 29 30 21 9

Threats Against JEA or Employees 20 33 30 29

Tampering Cases 46 43 86 79

Fraud Identity Theft Investigations 128 90 48 46

Fraud Identity Verifications 211 208 112 84

Copper Theft Investigations 3 4 9 6

Firearm Incidents on JEA property 3 4 3 7

Employee Investigations 26 17 31 30

Employee Investigations - OIG 1 11 10 6

Misc. Investigations 190 187 98 115

Assisted Other Agencies 29 26 32 45

126

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

IT AND COMPLIANCE

Ethics

Overview

JEA's Code of Ethics is designed to help foster an ethical environment, deter unethical behavior and cope with problems and ethical dilemmas. The JEA Code of Ethics is defined as standards that are reasonably necessary to promote and establish a foundation upon which our organization can operate and thrive. This includes:

• Honest and ethical conduct, as well as the ethical handling of actual or apparent conflicts of interest between personal and professional relationships

• Full, fair, accurate, timely and understandable disclosure of ethics issues

• Compliance with applicable governmental rules and regulations

• Proper financial reporting

City of Jacksonville Ethics Code

In addition to JEA requirements and policy, all of its officers and employees are subject to both the City of Jacksonville’s Ethics Code as set forth in Chapter 602,Ordinance Code, and the State of Florida’s Ethics Code as set forth in Chapter 112, Part III, Florida Statutes

Management’s Responsibility

Under most circumstances an employee's manager is the first point of contact with ethical concerns or questions

8

6

5

3

Ethics Hotline

FY2019 by Allegation Category

Discrimination/Harassment

General Inquiries

Conflict of Interest/Ethics

Matters

Fraud/Theft/Abuse

127

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Notes:


Subsection C

Enterprise Risk Management (ERM)

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

IT AND COMPLIANCE

Enterprise Risk Management

• JEA's ERM framework provides a conscious, systematic, holistic and effective approach to managing the compliance requirements, risks and opportunities inherent in a municipal electric, water and wastewater utility

• JEA’s ERM program identifies, assesses, measures and actively manages risk, including mitigation strategies and actions

• The risk score is calculated as the risk impact x likelihood and is used to evaluate the criticality of the risks and the need for mitigation. The impact and likelihood criteria include additional variables, each of which aid in our ability to determine risk criticality

– Financial impact now identifies the out-of-pocket /deductible financial impact after insurance coverage payment

– Reputational impact of a risk event occurring is now considered

– Velocity – Time frame of the risk event occurring is now considered

– Influence – Our ability to influence the impact and/or likelihood

– Preparedness – Assesses how prepared are we if the risk event occurs; by assessing the effectiveness of current mitigations that reduce the impact and/or likelihood

Enterprise Compliance & Risk Committee (“ECRC”)

• JEA’s ERM program is governed by the ECRC

• The purpose of the ECRC is to “oversee the incorporation of risk management into the major programs, corporate processes and functions of JEA”

• The ECRC consists of the Senior Leadership Team, the Director, Audit Services and the ERM Manager

• The ECRC is supported by various Subordinate Committees and Working Groups that coordinate mitigation efforts across the business functions. The Subordinate Committees also help define the risks, identify controls and required mitigations and provide recommendations to the ECRC on major risk management strategies/decisions

Tier 1 10 - 14 15 - 25

Tier 2 7 - 9

Tier 3 1 - 3 4 - 6

129

Enterprise Risk Management

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

IT AND COMPLIANCE

ERM - Risk Trends as of Current Quarter (Q4 FY2019)

Risk Title Total Risk Score Long Term Exposure Trend

>5 Years

E01 - Carbon Emission Mitigation/Renewable Energy Standards 16.0 ↑ Increasing

E10 - Nuclear Power Portfolio 15.0 ↑ Increasing

C03 - Disruptive Technologies/Long-term Planning 13.6 ↑ Increasing

C08 - Black Swan (High Impact - Low probability event) 11.2 ↔ Stable

E05 - Cooling Water Intake Structures 316(b) 10.5 ↔ Stable

H04 - Work Environment 9.6 ↑ Increasing

C18 - Supply Chain Management 10.5 ↔ Stable

C17 - Physical Security/Terrorism 10.5 ↑ Increasing

W01 - Water Supply Management/Long Term Planning 9.9 ↔ Stable

V16 - Weather & Climate Change Impact Resiliency Efforts 10.4 ↑ Increasing

Risk Score – New risk score includes the enhanced scoring criteria: Insurance, reputation, velocity, influence

and preparedness

130

Our Current Top Risks

131

Section 8

Supply Chain Management

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Notes:

SUPPLY CHAIN MANAGEMENT 132

Subsection A

Emergency Preparedness

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

SUPPLY CHAIN MANAGEMENT

State, County, & Agency Coordination

– The State of Florida’s Division of Emergency Management prepares and implements a Statewide Comprehensive Emergency Management Plan (“CEMP”)

– Duval County prepares and implements a Countywide CEMP

– JEA prepares and implements a Utility Wide CEMP

– JEA is the Lead Agency within the County Incident Command Structure (“ICS”) for utility response and restoration

National Incident Management System (“NIMS”)

• Establishes the National, State and Local framework to ensure response and recovery

• Utilizes the ICS for effective and efficient incident management

Proficient Response & Restoration

• Implements CEMP and NIMS/ICS for all hazards incident management

• Established Emergency Operations Center

• Electric, Water and Wastewater systems resiliency

• Storm material inventory

• Fleet reliability

Hurricane Restoration Performance Example

• Total customers – 445,832

• Peak storm outages (Hurricane Irma) – 284,982

• 120,000 restored within the first 24 hours

• 256,483 total restored within 100 hours

• 7 days total for complete restoration

Common organizational structures optimize emergency preparedness and response collaboration and

integration statewide

133

Emergency Preparedness | Overview

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47


TX LA

MS AL GA SC

NC

VA

MD DE

NJ

NY

CT RI MA

VT NH

ME

FL

3 - 4 5 - 6 7 - 9 10 - 12 13 - 14 15 - 16 17 - 19 20 - 25 26 - 32

Total Strikes 0 - 2

Total Number of Hurricane Strikes | 1900 – 2010

Jacksonville

Due to Jacksonville’s geographic location in the northeast corner of the state, the number of hurricanes that have struck Jacksonville is lower than other cities in Florida

134

The History of Florida Hurricanes

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47



135

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47



136

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Notes:


Subsection B

Procurement Overview

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

$0

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

$14,000,000

$16,000,000

QTR1 QTR2 QTR3 QTR4

Total Cost Difference Total Sourcing Savings Goal

80.00%

85.00%

90.00%

95.00%

100.00%

QTR1 QTR2 QTR3 QTR4Energy Vital Items: 231 Items Water Vital Items: 143 Items Safety Vital Items: 83 Items

Procurement

Public Purchasing Overview


• Procurement tracks two different types of savings:

– Total Cost Difference (Current Price vs. New Price +/-)

– Total Sourcing Savings (Negotiations, Best and Final Offers & Procurement added value)

JEA Purchasing Departments

• Inventory

– Planners and Buyers: Coded Items and Replenishes Inventory

• Services

– Services Buyers: Engineering, Professional Services, Construction, IT, Power Generation, Transmission & Distribution, and Water / Waste Water

• Contracts – 5 year terms

• JSEB – Jacksonville Small & Emerging Businesses

Procurement Savings

• Fair and open competition is a basic tenet of public procurement. Such competition reduces the opportunity for favoritism and inspires public confidence that contracts are awarded equitably and economically

• Procurement policies and procedures that adhere to all applicable federal, state and local laws and ordinances

• No JEA employee may benefit from a JEA contract

• Ensure the fair and equitable treatment of all persons who deal with the JEA Procurement System

Total Procurement Savings

Vital Item Availability

• Material availability for vital items

• Inventory investment

• Inventory accuracy

Procurement Inventory Planning

138

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Concrete Services

Janitorial Services

Landscaping Services


What is JSEB? Jacksonville Small and Emerging Business (“JSEB”) program is a race and gender neutral, local small business program, which has been in existence since 2004 which allows: sheltered markets for JSEB companies, JSEB subcontracting goals in open market solicitations and RFP evaluation criteria favoring JSEB companies

City Ordinance 2004-602-E requires City

Agencies to allocate 18% to 20% of their

available spend with JSEB certified firms

COJ manages the application process for JSEB certification. There are currently 300 certified JSEB Vendors

JSEB Requirements • Owner must either be a resident in Duval County

for a minimum twelve (12) consecutive month period immediately preceding the JSEB application date OR have an established business headquartered in Duval County for a minimum of 3 years, and be a resident in Duval, St. Johns, Nassau, Baker or Clay County for at least one year

• Personal net worth of $1,325,000 or less, excluding personal residence

• 3 year average gross receipts do not exceed $12M

• Own and control more than 51% of business • Be a for-profit and small business

JSEB Sheltered Markets

139

Procurement | JSEB Program

Available Project Spend FY2019

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Notes:


Subsection C

Fleet and Facilities Overview

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47


Fleet

Purchase Assets

Maintain Assets

Retire Assets

Heavy Duty Vehicles Medium Duty Vehicles Light Duty Vehicles Equipment and Trailers

267 483 396 486

JEA currently owns and operates approximately 1,600 assets in its fleet, worth about $111MM. The entire fleet lifecycle is managed by a staff of thirteen people and 100% of the repairs and maintenance are outsourced to local vendors

1

2

3

• Establish Replacement List & Additions

• User Meetings

• Specifications & Standardization

• Bid & Order Assets

• Receiving and In-processing

• Deploying New Units

• Preventative Maintenance

• Accidents/Damage/Misuse

• Corrective Maintenance

• Vendor Performance Monitoring

• Utilization

• After Hours Support

• Fueling

• Modifications

• De-commissioning

• Returning Replaced Assets

• Transfer to Investment Recovery

Fleet Lifecycle

141

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47


Facilities | Major Manned Facilities

142

Type No System Name # of

Buildings

SF of BLDG

Date Built Age (Years)

Capital Improvements

Date of last (or planned) Capital

Improvement

LAB 1 Water Springfield Lab 2 25,487 1870 149 $1,200,000 FY18-FY20

GEN 2 Electric Kennedy Generation Station 7 62,371 1910 109 $300,000 FY23

WWTP 3 Water Buckman 30 83,213 1961 58 $4,250,000 FY18-FY20

HQ 4 Water Plaza I 1 181,500 1962 57 New Headquarters

HQ 5 Water Plaza II 1 144,000 1962 57 New Headquarters

HQ 6 Electric Plaza III 1 20,000 1962 57 New Headquarters

SC 7 Electric South Side Service Center 10 43,675 1965 54 $2,000,000 FY21-FY22

GEN 8 Electric Northside Generation Station 79 464,805 1966 53 $300,000 FY20-FY22

SC 9 Electric Commonwealth Service Center 1 33,313 1969 50 $2,500,000 FY19-FY22

WWTP 10 Water District II 17 7,231 1969 50 $300,000 FY19-FY20

SC 11 Electric Westside Service Center 12 39,933 1970 49 $4,800,000 FY19-FY20

WWTP 12 Water Southwest 14 9,570 1977 41 $5,000,000 FY21-FY23

WWTP 13 Water Arlington East 16 21,635 1980 39 $2,000,000 FY22-FY23

WWTP 14 Water Mandarin 12 12,556 1980 39 $1,600,000 FY21-FY24

GEN 15 Electric SJRPP 4 3,600 1983 36 Decommissioned

CC 16 Electric SOCC 1 55,453 1988 31 $350,000 FY21-FY22

SC 17 Water Pearl Street Service Center 4 40,356 1989 30 $4,200,000 FY17-FY19

CC 18 Water Ridenour 3 12,908 1998 21 $500,000 FY17, FY19

GEN 19 Electric Brandy Branch Generation

Station 20 21,966 1999 20 $100,000 FY19-FY20

WWTP 20 Water Blacksford 8 11,200 2007 12 $80,000 FY19-FY20

GEN 21 Electric Greenland Energy Center 1 2,000 2010 9 $150,000 FY21

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Notes:


Subsection D


PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

JEA Embarked on a New Headquarters Project to address Remaining Risks to Current Downtown Campus (Unmitigated)

Facilities | Downtown Headquarters

Remaining Risks Include:


• Tower Basement Flooding – air handlers, generator, electrical switchgear in basement for entire building systems

• Water Intrusion – window and wall leaks from blowing, heavy rains, and risks to First Coast Radio Center equipment currently housed on T-18

• Elevator Malfunctioning – water intrusion, controls, electrical, high wind shut down

• EOC operation – requires off-site back-up, current option has limited space remote location farther from COJ EOC

• Call Center Back Up Location – limited space likely limits ability to provide similar service levels following a future storm

• Ongoing hurricane/grey sky risk

• General employee safety considerations

• Aging building conditions- current campus is in need of significant restoration and rebuilding with major building systems reaching the end of their useful lives

JEA Board Approves Adams Street Proposal • On April 2, 2019 a special Board Meeting was held to score

short-listed firms

• Evaluation criteria was divided into three sections:

presentation score, quantitative scores, and board scores

Current JEA Campus Adams Street

Location 21 West Church Street 325 West Adams Street

Location

Description Downtown Core, North Bank Downtown Core, North Bank

Site Type City Block City Block

Height/Layout 19 Floor Tower, 6 Floor Office 9 Floor Tower

Employee Count 760 984 (includes contract

employees)

Parking Type 2 Basements & Adjacent

garages (dedicated)

Adjacent Garage

(dedicated)

Parking Count 513 spaces 850 spaces

Schedule N/A 1st Qtr 2022

Sustainability N/A LEED Gold (proposed)

145

Section 9

People / Culture

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JEA’s Guiding Principles | Accelerating Utility Innovation

PEOPLE / CULTURE 146

GUIDING PRINCIPLES WERE DEVELOPED BY BOARD AND ALL 2,000 EMPLOYEES IN 2018 (FORMAL APPROVAL IN JANUARY 2019)

JEA Vision

Improve lives by accelerating innovation

Mission

Our mission is to provide the best service by

becoming the center of our customers' energy

and water experience

Corporate Measures

Our mission will be guided by and evaluated

against how we as employees drive these four

Corporate Measures of JEA’s Value

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Safety

Our

Cultural

Values

Service

Growth2

Accountability

Integrity

Ideas


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72 72 72

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JEA Workforce | The JEA Employee


The JEA Employee

• JEA’s workforce is primarily comprised of highly technical, highly trained individuals, which requires innovative recruitment initiatives and efforts

– STEM (Science, Technology, Engineering and Math) positions make up 18% of the JEA workforce

– Skilled & Semi-Skilled Craft and Technician positions make up 51% of the JEA workforce

• In FY2019, JEA had 2,158 budgeted employee positions of which 1,527 were budgeted to the Electric System, 625 were budgeted to the Water and Wastewater System and six were budgeted to the District Energy System

• The employees of JEA are considered to be governmental (public) employees and, as such, have the right to organize, be represented and bargain collectively for wages, hours and terms and conditions of employment, as provided in Chapter 447, Part II, Florida Statutes. Florida state law prohibits strikes and concerted work slowdowns by

governmental (public) employees

Ag

e P

rofile

Le

ng

th o

f Se

rvic

e P

rofile

Headcount

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JEA Workforce | Employment Categories


Employment Categories

JEA employees fall into the following three categories:

1. Appointed employees

• Appointed employees are exempt from the COJ Civil Service System and are appointed by, and serve at the pleasure of, the Managing Director/CEO. Appointed employees comprise the leadership of JEA and make up 21% of JEA’s employee population

2. Managerial and Confidential (M&C) employees

• Managerial and Confidential (M&C) employees perform jobs that are not of a routine, clerical, or ministerial nature and require the exercise of independent judgement in the performance of the job. JEA has less than ten M&C employees and they serve in Human Resources

3. Civil Service employees

• Civil Service employees are members of five bargaining units and comprise 79% of JEA’s employee population. The bargaining units are:

– American Federation of State, County, and Municipal Employees (AFSCME) – composed primarily of customer service, office support and laboratory personnel. National organization

– International Brotherhood of Electrical Workers (IBEW) – composed of employees in the Energy Department (generation, distribution, etc.). National organization

– JEA Supervisors Association (JSA) – composed of supervisors across the organization primarily in Energy and Water/Wastewater. Local organization

– Laborers’ International Union of North America (LIUNA) – composed of employees in the Water/Wastewater Department. National organization

– Professional Employees Association (PEA) – composed of professional individual contributors across departments (Engineers, Accountants, IT professionals, etc.)

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PEOPLE / CULTURE

JEA Workforce | Overview of Collective Bargaining Agreements

2019-726 (JEA Supervisor’s Association – JSA) Preamble: This Agreement is entered into on this first day of October, 2019 by and between JEA and its successors, and the

JEA Supervisors Association, hereinafter referred to as the "Association". It is the intent and purpose of the parties hereto: to promote and improve the efficient administration of JEA and the wellbeing of employees within the

meaning of collective bargaining laws and regulations; to establish a basic understanding relative to discussion and

adjustment of matters of mutual interest; and to implement mutually agreed upon rates of pay, wages, hours of

employment, and other terms and conditions of employment; to provide a procedure for the adjustment of

grievances so as to promote orderly and peaceful relations between JEA, its employees, and the Association

Significant Agreement Changes:

• Estimated increased cost of 3-year contract - $3.5MM

• General annual wage increases of 3.5% for Fiscal Years 2020, 2021 and 2022

• Increase in standby pay from flat dollar amount to 1.5 times hourly rate of employee

• Increase of $25 in safety shoe voucher • Paid parental leave program allowing up to 6 weeks of paid leave effective January 1, 2020

Recognition and Unit Determination:

In the event that JEA’s operation is sold, leased, transferred or taken by sale, transfer, lease or assignment, whether

by a public or privately owned entity, JEA shall make it a condition of any such transfer that the successor shall be

bound by the terms of this Agreement

2019-727 (American Federation of State, County, and Municipal Employees – AFSCME)




• One-time 1.5% lump sum ratification incentive

• Paid parental leave program allowing up to 6 weeks of paid leave effective January 1, 2020

Successorship:

• This Collective Bargaining Agreement shall be binding upon the Employer, the Union, their successors and assigns

and shall continue in full force and effect in the event of the recapitalization, sale, merger, acquisition or other

transfer of the business covered by this Agreement. As a condition of the sale or other transfer of the business

covered by this Agreement, JEA shall require the transferee to assume and adopt the terms and conditions of this

Agreement and continue to recognize the Union as the sole bargaining agent for the employees covered by this

Agreement • The successor employer shall:

– Recognize the Union as the exclusive representative of such employees

– Assume this agreement

JSA

150

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2019-728 (Professional Employees Association – PEA) Preamble: During the term of this Collective Bargaining Agreement, it shall be binding upon the Union and JEA,

their successors and assigns, and shall continue in full force and effect in the event of the sale or other transfer of the business covered by this Agreement. During the term of this Collective Bargaining

Agreement, JEA shall require the transferee to assume and adopt the terms and conditions of this

Agreement and to recognize the Union as the sole bargaining agent for the employees covered by this

Agreement. JEA agrees to make this a condition of the sale or other transfer of the business covered by

this Collective Bargaining Agreement



• General annual wage increases of 2% for Fiscal Years 2020, 2021 and 2022

• Performance Pay increases ranging from 0% to 4% each fiscal year

• One-time 1.5% lump sum ratification incentive • Increases in pay range minimums (2%) and maximums (3.5%) each fiscal year


2019-729 (Laborers’ International Union of North America – LIUNA) Preamble: This Agreement is entered into as of October 1, 2019 between JEA and/or any other co-op, partner, affiliate as a

result of any Recapitalization Event (Employer) and the Northeast Florida Public Employees' Local 630, Laborers'

International Union of North America, AFL-CIO-CLC (Union). It is the intent and purpose of this Agreement to assure

a sound and mutually beneficial working and economic relationship between the parties hereto, to provide an

orderly and peaceful means of resolving any misunderstandings or differences which may arise, and to set forth

herein basic and full Agreement between the parties concerning the rates of pay, wages, hours, and other terms

and conditions of employment. There are, and shall be, no individual arrangements contrary to the terms herein

provided. Either party hereto shall be entitled to require specific performance of the provisions of this Agreement. It

is understood that the Employer is engaged in furnishing essential public services which vitally affect the health,

safety, comfort, and general wellbeing of the public; and both parties hereto recognize the need for continuous

and reliable service to the public





• Increase of $25 in safety shoe voucher • Paid parental leave program allowing up to 6 weeks of paid leave effective January 1, 2020

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2019-730 (International Brotherhood of Electrical Workers – IBEW) Preamble: This Agreement is entered into on this First Day of October, 2019, by and between JEA and Local #2358,

International Brotherhood of Electrical Workers, hereinafter referred to as the "Union". It is the intent and purpose of

the parties hereto to promote and improve the efficient administration of JEA and the wellbeing of employees

within the meaning of collective bargaining laws and regulations; to establish a basic understanding relative to

matters affecting working conditions; to provide means for amicable discussion and adjustment of matters of

mutual interest; and to implement mutually agreed upon rates of pay, wages, hours of employment and other

terms and conditions of employment; to provide a procedure for the adjustment of grievances so as to promote

orderly and peaceful relations between the JEA, its employees, and the Union.

During the term of this Collective Bargaining Agreement, it shall be binding upon the Union and JEA, their successors

and assigns, and shall continue in full force and effect in the event of the sale or other transfer of the business

covered by this Agreement. During the term of this Collective Bargaining Agreement JEA shall require the transferee to assume and adopt the terms and conditions of this Agreement and to recognize the Union as the sole

bargaining agent for the employees covered by this Agreement. JEA agrees to make this a condition of the sale or

other transfer of the business covered by this Collective Bargaining Agreement.

The parties agree that this Agreement shall be applied impartially to all employees in the Unit. Days- referenced in

this Agreement shall be calendar days unless specifically stated otherwise. Gender- In applying the meaning of this

Agreement, the masculine includes the feminine and neutral, and vice versa






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JEA Pension Liability • Substantially all of JEA’s employees participate in the City’s general employees pension plan (“GEPP”)

– Employees of the Power Park participate in a separate pension plan

• For the five Fiscal Years ended September 30, 2015, 2016, 2017, 2018 and 2019, JEA contributed $40,179,000, $43,156,000, $48,942,000, $35,459,523

and $33,855,607 to the GEPP

– JEA expects that its annual contributions to GEPP will be at lower levels in the near term than it had been for Fiscal Year Ended September 30,

2017 primarily due to recognition of a pension liability surtax beginning with Fiscal Year Ended September 30, 2018 and then it expects its

annual contributions to GEPP to increase over the longer-term as a result of the expected increase in the GEPP’s unfunded actuarial accrued

liability

– The actuarial accrued liability is an estimate by the actuary for GEPP of the present value of the amount of earned benefit payments that

GEPP will pay to retirees during retirement. The unfunded actuarial accrued liability represents the amount that the actuarial accrued liability

exceeds assets in GEPP available to pay those benefit payments. These figures are based on numerous assumptions, such as retirement age,

mortality rates, and inflation rates, and use numerous methodologies all of which can cause the actual performance of the GEPP to differ

materially from the estimates of the actuary in any actuarial valuation

– JEA expects that the GEPP’s unfunded actuarial accrued liability and JEA’s portion of that unfunded liability will continue to increase over the

near term primarily due to a delay in receipt of the revenues from the pension liability surtax

• JEA also provides a medical benefits plan that it makes available to its retirees

SJRPP Pension Liability • The SJRPP Plan is a single-employer contributory defined benefit plan covering former employees of the Power Park. As of October 1, 2019, and

following cessation of commercial operations of the Power Park on January 5, 2018, no employees of the Power Park were engaged in

performing tasks associated with operations of the Power Park. Upon the cessation of commercial operations of the Power Park in January 2018

pursuant to the agreement entered into between JEA and FPL, JEA assumed all payment obligations and other liabilities related to any

amounts due to be deposited into the SJRPP Plan

• Former Power Park non-managerial employees were represented by IBEW Local 1618. In a prior collective bargaining agreement and under

statutory authority, certain terms and conditions of employment were imposed, including separating the existing JEA St. Johns River Power Park

System Employees’ Retirement Plan (“SJRPP Plan”) into two tiers of employees

− Tier One employees remained in the traditional defined benefit plan, and Tier Two employees (defined as employees with fewer than 20

years’ experience) participated in a modified defined benefit plan, or “cash balance” plan, with an employer match provided for any Tier

Two employee who contributes to the 457 Plan

− Tier One was closed to all new employees hired on or after February 25, 2013

• Closure of the plant triggered SJRPP Plan provisions resulting in accelerated eligibility for retirement at age 55 regardless of years of service.

− Members with at least 10 years of service on the plant closure date are eligible for a benefit starting at age 55, while all other members not

meeting conditions for the immediate unreduced retirement may be eligible for a reduced benefit starting at age 55

− With the exception of a small number of actively employed members who were eligible to continue membership in the plan based on

employment with JEA, benefit accruals were scheduled to cease on January 5, 2018

− Interest credits for Tier 2 participants are assumed to continue after the plant shutdown until the benefit distribution at age 55

JEA Workforce | Pension

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JEA Workforce | Learning & Development


• JEA’s Academy is committed to providing a creative and innovative

environment

• The JEA Academy team is committed to:

– Modeling the values of the organization by identifying, targeting and

exceeding the needs of our customers

– Dedicating and providing the educational and training resources that will

enable our employees to grow and succeed

– Continuously seeking and implementing innovative ideas, methods, and

materials to create a stimulating learning experience that is both effective

and rewarding

JEA Academy Mission

JEA Academy Benefits to Employees

• Employee development is a key resource to building skills and

competencies to achieve business results

• At JEA, we expect employees to take charge of their development relying

on leaders to coach and guide employees through the process. L&D

supports the organization’s learning and development needs with tools,

programs, processes and resources to allow employees to DEVELOP FOR

LIFE

• It is vital for all employees to continue to grow and learn in ways that align

with the changing organization and customer’s needs. As you enhance

your job skills, realize your potential and grow your career, you ensure JEA is

well positioned to stay ahead of the game in a fast paced environment

• JEA partners with local organizations to grow and develop talent, such as

Duval County Public School – Early College Program

• JEA currently has 5 state certified apprenticeship and 4 trainee programs in

various business units around the company

– Programs are typically 2-4 years which include classroom and hands-on

field work

– These positions typically work in adverse weather, in potentially dangerous

situations, such as working with high voltage or hazardous waste

JEA Builds Future Talent

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PEOPLE / CULTURE

Pro-Actively Seeking Safety (PASS)

JEA embraces a ZERO Incidents vision where preventive safety is a way of life, both on and off the job

The purpose of JEA’s Quarterly Safety Recognition Program is to

provide appreciation for significant performance and/or process

improvement in the area of safety. By raising awareness on a

regular basis, this program supports JEA’s Vision, Mission and

Principles for safety and fosters a proactive culture where safety is

recognized both on and off the job

Eligibility: Any JEA individual or team

• Recognition Criteria: Qualifying achievements may include:

– Process improvement that resulted in safer work practice or

environment- better tool, more efficient procedure

– A significant proactive act or exceptional effort that exemplifies

our Safety Principles

Rewards: A cross-functional JEA Safety Recognition Program

committee will evaluate all nominations and select winners using

established guidelines. This committee will determine rewards based

upon the merit of the achievement and input from the winning

individual(s) or team. Maximum reward not to exceed $50 per

person

Industrial Performance Program Innovative solution to address employee health and injury

prevention related primarily to minor sprains and strains. Nutrition

and exercise advice is also available. Programs are personalized,

provide coaching and increases health awareness

PASSPORT to Safety Program The Program was designed to focus on increasing participation in

activities proven to improve safety performance and to efficiently

collect leading indicator data for analysis and follow-up. Each

activity earns a point, two points are needed to earn one hour. An

employee can earn a maximum of 4 hours per quarter

0

2

4

6

8

10

12

14

16

18

20

15 16 17 18 19

RIR (incident rate) SIR (severity rate-days)

Safety Program Effectiveness

155

Safety Programs

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PEOPLE / CULTURE

FORBES 2019 AMERICA’S BEST EMPLOYERS LIST

811 811 LOCATOR EXCELLENCE AWARD

E SOURCE FORUM THE FATBERG INVASION

2019 TOP HONORS SAFETY AND EMERGENCY AD DIVISION

PUBLIC RELATIONS SOCIETY OF AMERICA

THE FATBERG INVASION 2019 RADIANCE AWARD, BEST SOCIAL MEDIA

PROGRAM 2019 BEST OF SUNSHINE AWARD, TOP OVERALL

CAMPAIGN

J.D. POWER ELECTRIC RESIDENTIAL

CUSTOMER SATISFACTION First Quartile, 2019

FIRST COAST WORKSITE WELLNESS COUNCIL

2019 HEALTHIEST COMPANIES Platinum Level

CHARTWELL BEST PRACTICES IN OUTAGE

COMMUNICATIONS 2019 Silver Award

FLORIDA MUNICIPAL ELECTRIC ASSOCIATION

TOP THREE PLACEMENT, ALL EVENTS

2nd Place Overall, 2019

FLORIDA WATER ENVIRONMENT ASSOCIATION

2019 EARL B. PHELPS AWARD 2019 EXCELLENCE IN BENCHMARKING

2018 SAFETY AWARD

INTERNATIONAL LINEMAN MUSEUM & HALL OF FAME

2019 INDUCTEE

TREE LINE USA TREE LINE USA DESIGNATION AWARD

8-time Recipient

RELIABLE PUBLIC POWER PROVIDER 2019 RP3 DIAMOND DESIGNATION

Recent JEA Awards

156

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https://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&ved=2ahUKEwjC27S0zd_kAhVPzhoKHeV6ApkQjRx6BAgBEAQ&url=https://ctirms.com/blog/cti-has-been-awarded-the-2017-gold-level-award-for-our-wellness-program/&psig=AOvVaw2GWvwHLvcp8mFvJ2yTGQss&ust=1569075904444164

https://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&ved=2ahUKEwjCsJ6Azt_kAhWx4YUKHVDRB8MQjRx6BAgBEAQ&url=https://www.publicpower.com/&psig=AOvVaw2CDrd0FEq4eSt_0SvjN6PS&ust=1569076061920713

https://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&ved=2ahUKEwjR0Y690d_kAhWCzYUKHVtDCv4QjRx6BAgBEAQ&url=https://www.chartwellinc.com/utilities-recognized-with-chartwells-2019-best-practices-awards-in-outage-communications/2019-purple-outage-comm-best-practices-04/&psig=AOvVaw0QzJOLxGp0wa43wEpcWxnx&ust=1569076996560313

https://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&ved=2ahUKEwjozsOjzt_kAhUuz4UKHcB5ACMQjRx6BAgBEAQ&url=https://www.fwea.org/fwea_fbc_workshop.php&psig=AOvVaw0NowLlEQFiJnXhc2JytDBf&ust=1569076140183171

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https://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&ved=2ahUKEwinnd-Bz9_kAhVuAGMBHRWBD2EQjRx6BAgBEAQ&url=https://okcoop.org/content/oec-named-tree-line-usa-arbor-day-foundation&psig=AOvVaw1tbUOIUM1T_5vznZ-mDS3k&ust=1569076316047310

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=2ahUKEwjzhdbHz9_kAhVHyxoKHYP1CJcQjRx6BAgBEAQ&url=/url?sa%3Di%26rct%3Dj%26q%3D%26esrc%3Ds%26source%3Dimages%26cd%3D%26ved%3D2ahUKEwjDoeHFz9_kAhWk4YUKHezbDjIQjRx6BAgBEAQ%26url%3Dhttps://www.garden-city.org/government/departments/public-utilities/electric/reliable-public-power-provider%26psig%3DAOvVaw3hNR62cwYFGeIHrz2jvhUD%26ust%3D1569076462598979&psig=AOvVaw3hNR62cwYFGeIHrz2jvhUD&ust=1569076462598979

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https://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=&url=https://playlistpush.com/home/forbes-logo-transparent/&psig=AOvVaw0b1BuKY0Oppm3O1ZOwgR7U&ust=1569076606049552

https://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&ved=2ahUKEwjH4tGp0N_kAhUJbBoKHXvpAHwQjRx6BAgBEAQ&url=https://www.pse.com/pages/know-whats-below&psig=AOvVaw3JeCfVgtCEP5fqzdHk2yHD&ust=1569076678052121

Section 10


157

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Upside Not Reflected in the Respondent Financial Model: Additional Growth Opportunities Harness Market Trends to Build Ambitious Businesses at a Larger Geographic and Commercial Scale, Driving Significant Value Creation

ADDITIONAL GROWTH OPPORTUNITIES

Additional Growth Opportunities are outside of the core

utility construct…

View capital access as

an enabler, not a

barrier

Set ambitious goals for

how JEA can evolve and

create value

Leverage synergies and

capabilities with future

partner(s)

JEA

Strategic

partnerships

Access to

capital

Bold

assumptions

Increase JEA’s water footprint via acquisition, using its top quartile operational performance and capabilities to provide more efficient, affordable services across Florida

A

Substantially grow JEA’s customer base for the District Energy System by executing the Lot J development and the larger master plan, with over 4 million of concentrated development

B

Increase dark fiber leasing as JEA invests in its digital communications network to ensure it can provide the speed and capacity needed by new, distributed smart assets at the grid edge

C

Monetize SJRPP and other owned land parcels for new development projects, such as a liquefied natural gas facility, dedicated port or rail facility, large data center with back-up generation, or new generation facility (already permitted)

D

Become the premier future solutions homes supplier in Florida, providing resource efficient, optimized ecosystems of products and services for

homes and communities

E

…and involve building a well-balanced set of dynamic, high value businesses operating beyond JEA’s service territory

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• Water System Opportunities

− Financial projections do not consider the potential upside from expansion of the Water and Wastewater System through local water utility system acquisitions, similar to the near-term opportunity presented by the current Mayport Naval Station RFP contemplating transfer of ownership and management of its of the wastewater utility system

• District Energy Expansion Opportunities

− Financial projections do not reflect the potential to add additional customers as a part of the Lot J development and the larger master plan that encompasses over 4 million square feet of concentrated development

• Dark Fiber Growth Opportunities

− Financial projections do not include further monetization of excess capacity of JEA’s fiber-optic network through 3rd party leases

− Proliferation of smart, distributed devices will likely require increases in network capacity and speed, supporting expansion of

the fiber-optic network

• Owned Land Opportunities

− Financial projections do not capture potential to monetize JEA’s land and other owned land parcels for the following potential uses:

• Emerging Future Homes Opportunities

− Financial projections do not include opportunities to participate in the emerging Future Homes market

− JEA’s deep expertise in the engineering, management, and maintenance of energy and water systems would be valuable to many potential partners seeking to develop integrated home solutions for resilience, resource efficiency and automation/control

Additional Growth Opportunities:


Financial projections do not account for numerous tangible sources of potential upside

A

B

C

D

E

o Liquefied Natural Gas Facility o Dedicated Port and/or Rail Facility

o Large Wholesale Data Center with dedicated generation o New Generation Facility (Currently Permitted)

159

Additional Growth Opportunities Not Reflected in Respondent Financial Model

S

C E

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District Energy Expansion Opportunities | Lot J Development

Lot J Development Overview • On July 31, 2019, the City of Jacksonville announced an

agreement with the Jacksonville Jaguars to invest and redevelop land, known as “Lot J”, located adjacent to TIAA Bank Field

– Development plans for Lot J include a high-rise apartment building, a boutique hotel, office space, a live entertainment venue, and 13,000 parking spaces

– As part of the agreement, the City would provide more than $230MM in grants and infrastructure improvements

– The remaining $220MM of investment will be provided by the Jacksonville Jaguars

• Under the Lot J agreement, the City would give developers the land for the Lot J high-rise tower(s), the boutique hotel, the office tower and a mid-rise residential building or buildings

• The City has pledged $92.8MM in infrastructure improvements in the area including necessary utility upgrades

• Development is expected to begin in 2Q2020

• The Lot J project is part of a larger overall master plan that could reach $2.5Bn and extend to the nearby shipyards, encompassing over 4MM square feet

Lot J Site

JEA District Energy System Growth Opportunity

• Given the close proximity of Lot J to JEA’s Hogan’s Creek chilled water facility and existing JEA District Energy System infrastructure, the Lot J development is a tangible opportunity for expansion of the system

– Concentrated development provides ability to acquire customers at scale at a lower infrastructure investment cost

• Potential for additional development outside of Lot J as part of the larger master plan offers incremental opportunities for customer acquisition

Hogan’s Creek Chilled Water Facility Chilled Pipe

160

S

C E

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142

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72 72 72

75 121 163

207 120 0

78 106 47


Downtown Expansion Opportunities

Courthouse 501 W. Adams St.

3,350T

State Attorneys Office 311 W. Adams St.

635T

JEA Office Building (Proposed)

337 W. Adams St. 535T

Ambassador Hotel 420 N Julia St.

235T

West Duval Towers 233 W Duval St.

(Unknown)T

Ed Ball Building 214 N Hogan St.

700T

City Hall 117 W. Duval St.

400T

Library 303 N. Laura St.

1,000T

Library Garage 33 W. Duval St.

85T

City Hall Annex 407 N. Laura St.

100T

JEA Plaza 21 W. Church St.

700T

Admin Building 124 W. Ashley St.

Lindsay Building 130 W. Ashley St.

Children’s Building 600 Main St.

400T

Preschool Building 125 W. Ashley St.

600T

Lindsay Memorial Auditorium

139 W. Ashley St. 200T

First Baptist Church Main Auditorium 119 W. Beaver St.

800T

161

S

C E

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72 72 72

75 121 163

207 120 0

78 106 47

Overview


IoT/

IIoT

Subs

crip

tion

Serv

ices

•Leverages JEA field network resources

•Monetizes investments with recurring revenue

Publ

ic F

acin

g W

iFi •Extend JEA

messaging and commitment to community services

•Leverages underlying network for JEA/public use

•Advertising revenue

Dow

ntow

n Fi

ber N

etw

ork •Unique

opportunity to leverage infrastructure to connect

•JaxNAP located downtown

Smar

tCity

Opp

ortu

nitie

s • Innovation corridor launched on Bay St downtown

•Opportunity for further community advancement through utility investment

Fixe

d W

irele

ss

•Utilize JEA towers and fiber network to provide core wireless network

•Sub-core network on JEA street lights and other vertical infrastructure

Broa

dban

d Se

rvic

es

•Existing infrastructure provides competitive advantage for entry

•High-margin proposition

Telecommunications Investments

as an Enabler

IoT/IIoT Subscription

Services

Public Facing WiFi

Downtown Fiber

Network

SmartCity Opportunities

Fixed Wireless

Broadband Services

• Proliferation of smart, distributed devices will likely require increases in

network capacity and speed, supporting expansion of the fiber-optic

network

• Increase dark fiber leasing as JEA invests in its digital communications

network to ensure it can provide the speed and capacity needed by

new, distributed smart assets at the grid edge

• By investing in telecommunications infrastructure, JEA can enable

improved operations and community development while enhancing

returns

162

Dark Fiber Growth Opportunities

S

C E

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72 72 72

75 121 163

207 120 0

78 106 47

History

• Until it was closed in January 2018, SJRPP was a large coal-fired

electric generating plant, featuring two turbine/generators that each

supplied 632 MW to the transmission grid

• When the plant was constructed in the early 1980s, it was the largest

construction project in Jacksonville's history, taking six years to build,

at a cost of $1.45Bn

• Facility is jointly owned by JEA – 80% share, and Florida Power and

Light – 20% portion

• After nearly 30 years in service, SJRPP closed on January 5, 2018.

Catalytic reactors, cooling towers and smokestacks were imploded

– Demolition and site remediation will continue until mid-2020

• Decommissioned plant is located on a 1,600 acre site in Northeast

Jacksonville

• JEA will retain 100% of site ownership at the completion of

remediation; therefore, site is included as part of the generation

portfolio

The Future of SJRPP

• Decommissioning of the generation site creates an extremely unique

opportunity for JEA, freeing up a large, unencumbered parcel of

land that is accessible by water for a variety of import/export uses

• Other potential uses of the asset include:

– Dedicated port facility

– New generation facility (currently permitted)

– Large wholesale data center w/ dedicated generation

– Property sales for redevelopment reflected in “Management Sales

Initiatives” HoldCo revenue in Respondent Financial Model

Source: JEA internal data


Closing the Power Park reduces JEA carbon emissions by 30% and saves $50MM in operating expenses per year

163

Owned Land Opportunities | St. Johns River Power Park

S

C E

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142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47


The Home of the Future will be fully automated, efficient, and resilient…

▪ The confluence of automation and energy / water efficiency is revolutionizing homes

– The home control/ automation market is fast growing, with over 30% growth projected through 2022 and $39Bn worth of system sales in the US in 2019

– Energy efficiency is becoming mainstream – ACEEE estimates that emerging EE technologies can reduce consumption an additional 40-60% by 2050

▪ As Florida storms become more frequent and intense, customers are increasingly interested in resiliency products

What it takes for JEA to be successful

Deep energy and water expertise, including system optimization

A partner with operational capabilities to install and maintain cutting edge home appliances in the crowded contractor market

A sophisticated marketing and sales organization that can acquire and educate customers outside JEA’s current geography

A financial partner that can underwrite / support flexible financing of customers’ end systems

How JEA can capture value

▪ JEA will provide a packaged set of Future Homes solutions to revolutionize housing in Florida

▪ This business could “play” in the following spaces:

– Provide engineering, design, and installation services of Future Homes packages for new build developers

– Offer flexible financing (e.g., “rent to own”, tariff financing) to incentivize adoption

– Maintain and optimize resource use for ecosystems of home devices, using the home as a grid asset

– Retrofit existing homes and communities

…but there is not yet a clear “winner” in the Future Homes solutions space

▪ Recent market growth is fragmented across appliance contracting, energy services, and technology, stalling further adoption

▪ Utilities sit at the nexus of these industries, and have the relationships (e.g., with customers, contractors) and capabilities to tap into the nascent Future Homes market

Backup storage

Energy efficient home

appliances

Distributed generation

Water efficient

appliances

L2 EV charger Home

automation / control

interface

Smart meters

By the

numbers –

market

potential

2MM new build homes in FL

projected between 2020-30,

requiring require nearly $20Bn

worth of appliances

At this trajectory,

Homes of the Future

can make up a $1.3Bn

market in Florida in 2030

Over 1 in 3 2030 homes could

be fully efficient, using recent

growth in the home automation

market as a proxy (1)

Note: 1. The smart thermostat and HVAC market grew 36% p.a. between 2014-18 - whole home systems could follow the same trajectory

Source: U.S. Census Bureau (BOC): New Residential Construction (C20, C22); Moody's Analytics Estimated and Forecasted, Alternative Fuels Data Center

Overview JEA has or could build this capability internally

JEA would likely need to partner to build this capability

JEA has an opportunity to become the premier, smart, efficient homes solutions supplier for Florida developers

and communities, providing solutions for resilience, resource efficiency, and automation/control

Emerging Future Homes Opportunities

164

Appendix 1 Operational Incentives

165

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Notes:

ADDITIONAL GROWTH OPPORTUNITIES 166

Subsection A

Generation Initiatives

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142

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72 72 72

75 121 163

207 120 0

78 106 47

Initiative Description

Key Activities Completed Key Activities to Execute

Improve

generation

efficiency to

reduce use of

fuels, other

consumables

• Institute performance tracking of

heat rate to reduce variability

and controllable losses

• Improve technical performance

(e.g., clean HRSG, install better

air inlet filter)

• Reduce limestone usage by

installing new crush and burn

system

• Completed Brand Branch U2 and U3 AGP 7.05

upgrades. This reduced heat rate/fuel

consumption by ~167 BTU/kW or ~$11MM/yr of

fuel cost, while adding ~100 MW of summer

capacity

• Completed NGS U1 Lime Utilization project for

an annual lime consumption savings of

~$3.7MM/yr

• Increased SDA reuse ash/lime slurry density from

18% to 20% with no identified operational issues.

Goal is to continue to increase until reaching

peak system capability. Increasing reuse

material utilization decreases the cost of raw

lime requirements

• Implement heat rate monitoring tools (e.g.,

etaPRO) and include heat rate as a day-to-day

performance KPI

• Identify controllable parameters (e.g., boiler

temps, backpressure) deviating from design

and problem-solve operational solutions (e.g.,

adjusting tilts) or technical solutions (e.g., filter

replacements) to address

• Coach plant operators on identified

interventions to reduce heat rate

• Review utilization of consumables (e.g.,

limestone) to ensure excess materials are not

used

Frontline

operational

excellence

• Increase crew productivity by

improving core work processes

(e.g., planning and scheduling)

and increasing “wrench time” for

core workflows, e.g.:

− Break-ins (e.g., bearing

failures)

− PMs (e.g., oil replacement)

• Optimize resourcing and

schedules of craft across shifts to

match volume of work with

resources

• Reorganized facility Operations and

Maintenance organizations to focus on

streamlining work processes and organizational

hierarchy levels

• Developed and initiated Plant level KPI’s

designed to monitor and measure work flow

efficiencies

• Expanded Operations and Maintenance

Training programs to increase worker skill level

knowledge. This includes the purchase and

utilization of unit specific simulator capabilities

• Perform site observations and ride-alongs of

workflows (e.g., valve replacements) to

develop a fact base

• Identify opportunities to increase productivity by

collaboratively engaging the frontline (i.e., idea

generation sessions) and/or leveraging industry

best practices

• Develop action plans to implement new best

practices (e.g., pre-kitting CMs) and coach

front-line on implementation

• Pilot and test new practices

• Refine and scale, monitoring KPIs to validate

impact

Lower fuel

expenses

• Outsource fuel handling services

where appropriate to cost-

competitive third-party providers

• Conducting test and modifying operational

parameters to capitalize on current fuel price

trends, by adjusting fuel blend capabilities on

NGS U1 and U2 from existing 60/40 up to 80/20

pet coke to coal blends

• Negotiate with 3rd party contractors to

manage fuel handling activities

• Redeploy internal labor to other functions as

needed

167

Generation Initiatives

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142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47



Spend

management

• Reduce demand for third-party

materials and services by

applying stricter purchasing

controls and standardizing

material request submissions, e.g.:

− Reducing frequency of use

− Revising specifications

− Insourcing work when possible

• Reduced contractor support labor cost

associated with planned outages by

reallocating internal “sunk” labor resources for

critical and expanded work assignments.

Estimated contractor savings during U1 2019 Fall

Scheduled Outage at ~$1MM

• Implemented a “Control Tower” purchasing

review process associated with P-card

purchases in July 2019. YOY, July thru Oct

spend reduction is ~$398k

• Aggregate purchasing system data into a

centralized database that enables

management to review ending POs for the

upcoming weeks

• Build on newly established weekly meeting to

review all pending spend items to determine

whether the spend is necessary, or if cheaper

solutions are available

Strategic sourcing

• Negotiate lower commercial

rates for materials and services

by:

− Introducing new providers to

increase competition

− Expanding supplier

performance management

systems and methodologies

− Leveraging additional

flexibility as a non-

governmental entity

• Develop supplier “scorecards” to measure

performance against key KPIs

• Embed a TCO (total cost of ownership)

approach within the procurement organization

• Align category managers with BUs to identify

opportunities to create value through sourcing

events

• Develop “should-cost” or clean-sheet models to

support supplier negotiations

168

Generation Initiatives (cont’d)

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Notes:


Subsection B

Transmission & Distribution Initiatives

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47



Frontline

operational

excellence

• Increase crew productivity by improving

core work processes (e.g., planning and

scheduling) and increasing “wrench

time”, e.g.:

− All jobs are work ready

− Morning kickoffs start on-time

− Daily debriefs and feedback on

opportunities

• Redesigned Southside Service Center

yard to improve traffic flow and material

laydown to increase safety and

productivity

• Developed leadership observation

expectations to increase safety and

productivity

• Develop action plans to implement new best

practices (e.g., pre-kitting jobs) and coach

front-line on implementation

• Pilot and test new practices within one yard

• Refine and scale to remaining yards, monitoring

KPIs to validate impact

Digitalize

frontline

operations

• Further optimize processes, building off

the improvements from frontline

operational excellence by applying a

series of digital tools that further increase

productivity, improve customer

experience, and maintain safety, e.g.:

− Improve planning and scheduling by

accounting for site conditions, real-

time crew locations

− Automate clerical tasks (e.g., dig

requests, time sheets)

− Enable digital collection of asset

condition data

• Workshops help to identify digital tool

gaps and create the requirements for a

new work management system

• Stand up agile development teams that

collaborate with the end users to develop MVPs

(minimum viable products) to test with the

frontline (e.g., automated scheduling based on

job specs, geographic location, and available

crews)

• Pilot with individual crews

• Refine and scale by expanding across the fleet,

monitoring KPIs to validate impact

Spend

management

• Reduce demand for third-party materials

by applying stricter purchasing controls

and standardizing material request

submissions:

− Reducing amount or frequency of use

− Revising specifications



management to review POs pending for the

upcoming weeks

• Establish a weekly meeting to review all

pending spend items to determine whether the

spend is necessary or if there are cheaper

solutions available

170

T&D Initiatives

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47



Vegetation

management

• Improve procurement process, bid

packages and bidding practices;

implement performance

management (e.g., miles trimmed

by crew per day)

• Optimize long-term cycle planning and work management through

machine learning that identifies

highest areas of need relative to

system priority and risk

• Improve quality assurance process and in-the-field forester audits

• Utilize a mixture of time and material

rates as well as unit rates (cost/mile)

to minimize cost exposure

• Launch strategic sourcing event for

vegetation management; expand

universe of potential suppliers and review

contract structures

• Implement performance management to

track productivity

• Investigate feasibility of vegetation

analytics that uses external data to

improve vegetation management

practices and lower costs

Strategic

sourcing

• Negotiate lower commercial rates

for materials and services by:

− Introducing new providers to increase

competition

− Expanding supplier performance

management systems and

methodologies

− Leveraging additional flexibility as a

non-governmental entity


approach within the procurement

organization

• Align category managers with BUs to

identify opportunities to create value

through sourcing events

• Develop “should-cost” or clean-sheet

models to support supplier negotiations



171

T&D Initiatives (cont’d)

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Notes:


Subsection C

Water & Wastewater System Initiatives

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47



Frontline

operational

excellence

• Optimized water plant production

and pumping will extend

equipment life and reduce

operating costs while providing

consistent water pressures

• Intelligent operation of sewage

pumps and use of wet well storage

to operate pumps during optimal

timing on the hydraulic manifold

system. This will reduce pump

operating costs, pump wear and

needless pump oversizing

• Actively negotiating with two proposers for a 20

year sludge cake deal

• Getting out of the pellet fertilizer business saving

about $1MM/year in avoided natural gas

purchase and gas produced in our digesters will

can be sold on the RNG market

• Install additional water pressure sensors

strategically throughout water service areas

• Feed real time water pressure to water hydraulic

model

• Review pumping histories to identify inefficiencies

• Develop new rules/logic for managing pump

schedules to minimize inefficient operation for

water and sewage collection pumping

• Install on-site AI computing equipment at master

sewage pump stations

• Install force main pressure sensors at contributing

pump stations

Digitalize

frontline

operations

(wastewater

treatment)

• Further optimize processes, building

off the improvements from frontline

operational excellence by

applying a series of digital tools

that further increase productivity,

improve customer experience, and

maintain safety, e.g.:

− Leverage equipment sensors to

reduce the need for manual

inspection

− Use machine learning

algorithms to drive predictive

and condition-based

maintenance

− Improve planning and

scheduling by accounting for

job type, crew locations, etc.

• Virtual pump station operational and in testing,

additional equipment sensors installed at master

pump station including: vibration monitors, infra-

red cameras, high definition cameras, thermal

imaging cameras, etc., to allow for remote visual

inspection and monitoring as well as event driven

notifications. Gravity flow sensors for I&I tracking

and gravity system cleaning optimization have

been tested and implemented. Machine learning

from the sensor data will drive predictive and

condition based maintenance

• Tablet devices initial configuration being tested to

allow real time data collection and data

dissemination to field forces

• Identified opportunities to digitalize elements of

core workflows

• Created agile development teams that


• Identify opportunities to digitalize elements of core

workflows by applying design thinking and

leveraging best practices from across the industry

• Stand up agile development teams that


(minimum viable products) to test with the frontline

(e.g., automated scheduling based on job specs,

geographic location, and available crews)

• Pilot with individual crews

• Refine and scale by expanding across the fleet,

monitoring KPIs to validate impact

173

Water & Wastewater Initiatives

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47



Reduce

auxiliary load

• Reduce pumping costs by

optimizing pumping cycles to

ensure pump stations do not work

against each other (i.e., reduce

electricity consumption)

• Artificial intelligence program in development

for water system pressure and pumping

optimization. Eighty water pressure sensors in

the water treatment test grid have been

installed and are transmitting data into pi and

are being used for the AI development

• Intelligence from this program will aid in a similar

initiative in the sewage pumping systems. Fiber

optics communication has been installed at 40

master stations

• Install additional water pressure sensors

strategically throughout water service areas

• Feed real time water pressure to water

hydraulic model

• Review pumping histories to identify

inefficiencies

• Develop new rules/logic for managing pump

schedules to minimize inefficient operation for

water and sewage collection pumping

• Install on-site AI computing equipment at

master sewage pump stations

Spend

management

• Reduce demand for third-party

materials by applying stricter

purchasing controls and

standardizing material request

submissions, e.g.:

• Revising material specifications

• Purchasing through wholesale

channels

• Closely monitor and report to business

managers expenses at a micro level. Also

alerting them when expenses are trending to

exceed budgets



management to review POs pending for the

upcoming weeks

• Establish a weekly meeting to review all

pending spend items to determine whether the

spend is necessary or if there are cheaper

solutions available

Strategic

sourcing

• Negotiate lower commercial

rates for materials and services

by:

− Introducing new providers to

increase competition

− Expanding supplier

performance management

systems and methodologies

− Leveraging additional

flexibility as a non-

governmental entity


approach within the procurement organization

• Align category managers with BUs to identify

opportunities to create value through sourcing

events

• Develop “should-cost” or clean-sheet models to

support supplier negotiations



174

Water & Wastewater Initiatives (cont’d)

PROJECT SCAMPI

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142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Notes:


Subsection D

Customer Initiatives

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47


Context for Management Case

Frontline

operational

excellence

• Increase frontline (e.g., call center agents, meter

team) productivity by:

– Optimizing capacity and skill-based routing, cross-

skilling of agents, and improved scheduling that

matches call volumes

– Conducting people analytics, leveraging data to

unlock further improvements to availability,

average handle time, and first call resolution

through directed coaching and real-time speaking

guidance

• Benchmarking indicated call centers are performing in the top

quartile relative to other utilities

• Perspective of the Customer team is that there is limited non-

digital opportunity

Digitize

customer

journeys

• Shift customers to digital self-service by creating

simple, intuitive web and app-based solutions for key

journeys, e.g.:

– Bill payment

– Sign-up-and-move

– Experience an outage

• Significant opportunity to shift customers to digital self-service with

high potential for success

• Established business models and approaches from within and

beyond the utility industry

• Limited progress to-date capturing the opportunity

Deploy

automation

• Contain IVR calls by analyzing reasons for leakage

and adjusting IVR flow and logic

• Utilize Robotic Process Automation to eliminate

repetitive tasks (e.g., complex, manual billing) and

natural language processing to standardize data

extraction (e.g., from recorded IVR calls)

• Conservative assessment of activities that could be rapidly

automated within the Revenue group. Considerable upside

potential over the 10-year window

176

Customer Initiatives

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47


Context for Management Case

Spend

management

• Reduce need for meter reads through digital smart

meters and billing quality control

• Enhance routing based on crew location and skillsets

• Leverage same digital field force tools developed for water and

T&D

• Significant share of truck rolls due to billing errors that can be

reduced through automated solutions

• Additional impact from further penetration of smart meters

Strategic

sourcing

• Negotiate lower commercial rates for materials and

services by:

– Introducing new providers to increase competition

(e.g., staff augmentation labor during outages)

– Expanding supplier performance management

systems and methodologies (e.g., on-time delivery,

measuring time to complete jobs)

– Leveraging additional flexibility as a non-

governmental entity (e.g., outsource engineering,

flexibility to discontinue vendors without multiple

notices)

• Assumes JEA's small purchasing power will limit some of the

opportunity created by removing current procurement

requirements

177

Customer Initiatives (cont’d)

Appendix 2 Organizational Detail

• 178

PROJECT SCAMPI

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142

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72 72 72

75 121 163

207 120 0

78 106 47

Note: 1. The JEA Fiber Optic network is a diverse network traversing the majority of Jacksonville. The network connects JEA’s electric substations, electric generation facilities, water plants, wastewater facilities, lift stations, and all JEA’s Operations

facilities. The fiber strand count varies throughout the fiber network with approximately 70% of the assets located overhead on Electric Distribution and Transmission structures and 30% underground in conduits. The fiber located on Electric Transmission structures may have limited use due to property easement restrictions.

Corporate Organizational Chart

Bulk Power Supply System

Electric System

St. Johns River Power Park

System


Fund

Water and Wastewater

Enterprise Fund

Electric

Enterprise Fund


Water and Wastewater

System

(1)

179

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142

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72 72 72

75 121 163

207 120 0

78 106 47

Organizational Chart| Energy System Leadership Team

180

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Organizational Chart | Water & Wastewater System Leadership Team

181

PROJECT SCAMPI

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142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

(Caffey, Russel)

Organizational Chart | Financial Services Leadership Team

182

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

JEA Workforce | Customer Engagement Leadership Team

183

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Organizational Chart | Human Resources Leadership Team

184

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Organizational Chart | Planning Leadership Team

185

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Organizational Chart | Technology Services & Innovation Leadership Team

186

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Organizational Chart | Supply Chain Management Leadership Team

187

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Organizational Chart | Environmental Services Leadership Team

188

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Organizational Chart |Compliance Leadership Team

189

Appendix 3 Accounts & Sales

190

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Accounts & Sales | Electric System

Customer & Sales

In the Fiscal Year ended September 30, 2019, the Electric System served an average of 475,786 customer accounts

Customers are billed on a cycle basis approximately once per month. If the customer has not paid a bill within 42 days after the initial bill date, JEA may discontinue service to that customer. New commercial accounts are generally assessed a deposit. Residential customers who meet JEA’s credit criteria are not assessed a deposit. Customers who do not meet JEA’s credit criteria or do not maintain a good payment record may be assessed a deposit, which may vary with consumption. A late payment fee of 1.5 percent is assessed to customers for past due balances in excess of 27 days. The amount of uncollectible accounts is budgeted to be approximately 0.15 percent of estimated gross Electric System revenues for the Fiscal Year ending September 30, 2020. Actual uncollectible accounts were 0.13 percent of gross Electric System revenues for the Fiscal Year ended September 30, 2019

Customer Billing Procedures

Fiscal Year Ended September 30 2019 2018 2017 2016 2015

Electric Revenues:

Residential $ 629,355 $ 618,171 $ 584,663 $ 599,009 $ 619,897

Commercial and industrial

590,473 594,395 587,972 596,802 627,547

Public street lighting 13,176 12,873 13,069 13,488 11,982

Sales for resale 3,914 5,474 21,813 32,204 32,424

FPL saleback 1,664 30,767 128,737 130,053 128,475

TOTAL $1,238,582 $1,261,680 $1,336,254 $1,371,556 $1,420,325

Sales (MWh):

Residential 5,515,428 5,414,721 5,108,945 5,328,245 5,243,002

Commercial and

industrial

6,793,557 6,851,803 6,725,201 6,834,601 6,767,836


Sales for resale:

Off-system 99,563 74,069 300,903 487,334 417,361

FPL saleback 0 332,467 1,693,082 1,856,198 1,862,122

TOTAL 12,465,958 12,732,236 13,893,852 14,586,486 14,379,697

Average Number of

Accounts:

Residential 418,728 410,060 403,164 396,664 389,287

Commercial and

industrial

53,204 52,573 52,060 51,472 50,867


Sales for resale(1) 0 1 2 3 2

TOTAL 475,786 466,411 458,953 451,788 443,705

191

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Accounts & Sales | Water & Wastewater System

Customer & Sales Water System

During the Fiscal Year ended September 30,

2019, the Water System served an average of

355,635 customer accounts and 14,267 reuse

water customers, respectively.

Wastewater System

During the Fiscal Year ended September 30,

2019, the Wastewater System served an

average of 277,815 customer accounts

Customers are billed on a cycle basis

approximately once per month. If the

customer has not paid a bill within 42 days

after the initial bill date, JEA may discontinue

service to that customer. New commercial

accounts are generally assessed a deposit.

Residential customers who meet JEA’s credit

criteria are not assessed a deposit. Customers

who do not meet JEA’s credit criteria or do not

maintain a good payment record may be

assessed a deposit, which may vary with

consumption. A late payment fee of 1.5

percent is assessed to customers for past due

balances in excess of 27 days. The amount of

uncollectible accounts is budgeted to be

approximately 0.12 percent of estimated gross

Water and Wastewater System revenues for

the Fiscal Year ending September 30, 2020.

Actual uncollectible accounts were 0.12

percent of gross Water and Wastewater

System revenues for the Fiscal Year ended

September 30, 2019

Customer Billing Procedures

Fiscal Year Ended September 30 2019 2018 2017 2016 2015

Water Revenues Residential $ 96,699 $ 91,954 $ 96,615 $ 89,946 $ 86,215 Commercial and Industrial 47,619 47,494 47,969 46,212 45,078 Irrigation 34,800 32,004 36,836 34,846 32,681 Subtotal $179,118 $171,452 $181,420 $171,004 $163,974 Reuse Water 17,909 13,659 13,216 10,267 7,378

TOTAL $197,027 $185,111 $194,636 $181,271 $171,352 Water Sales (kgals):

Residential 17,921,588 16,932,812 17,624,952 17,086,586 16,271,698 Commercial and Industrial 13,958,000 14,023,130 13,402,094 13,343,376 12,870,984 Irrigation 5,816,484 5,230,617 6,218,142 5,927,957 5,415,602 Subtotal 37,696,072 36,186,559 37,245,188 36,357,919 34,558,284 Reuse Water 3,884,210 3,119,739 3,290,311 2,644,046 1,783,730

TOTAL 41,580,282 39,306,298 40,535,499 39,001,965 36,342,014 Average Number of Accounts:

Residential 292,460 285,404 278,838 272,157 265,373 Commercial and Industrial 25,963 25,702 25,423 24,698 23,951 Irrigation 37,212 37,053 36,755 36,284 36,028 Subtotal 355,635 348,159 341,016 333,139 325,352 Reuse Water 14,267 11,498 9,391 7,498 5,891

TOTAL 369,902 359,657 350,407 340,637 331,243

Fiscal Year Ended September 30

2019 2018 2017 2016 2015

Wastewater Revenues

Residential $146,186 $139,174 $143,967 $135,288 $129,976

Commercial and Industrial 110,724 108,126 107,446 103,731 101,910

TOTAL $256,910 $247,300 $251,413 $239,019 $231,886

Volume (kgals):

Residential 15,717,129 14,623,682 15,225,124 14,614,026 13,935,981

Commercial and Industrial 12,009,667 11,716,940 11,487,646 11,203,632 10,987,160

TOTAL 27,726,796 26,340,622 26,712,770 25,817,658 24,923,141

Average Number of Accounts:

Residential 259,308 252,531 246,187 239,738 233,203

Commercial and Industrial 18,507 18,340 18,149 17,981 17,771

TOTAL 277,815 270,871 264,336 257,719 250,974

192

Appendix 4 Risks

193

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47

Risk Business Area Description

Carbon Emission

Mitigation/Renewable

Energy Standards

• Electric System

• Environmental

• JEA’s current power generation fleet, fuel mix, and dispatching strategies may not

meet expected new regulatory requirements such as mandated by a State or Federal

Plan possibly resulting in increased costs for purchased power, more expensive

generation, and/or the purchase of allowances

Nuclear Power Portfolio • Electric System

• Financial Services

• Plant Vogtle 3 & 4 are the first new nuclear units to be licensed since 1978. With these

units still under construction and already greatly behind schedule and over budget,

the potential for further cost and schedule overruns are a concern

Disruptive

Technologies/Long-term

Planning

• Planning

• Electric System

• Water System


• Emerging new technologies are providing some customers with an increasing number

of options for reducing energy and water usage, and/or using alternative energy

sources (e.g., natural gas). If this leads to decreased revenues from these customers, it

could increase costs to the customers who are not participating in these new

technologies. In addition, the cost of investing in new technologies and maintaining

the existing infrastructure while in a period of declining revenues may have a

significant negative impact on JEA’s financials, and our ability to meet our debt

obligations

Black Swan (High Impact -

Low probability event) • All

• JEA would be negatively impacted if certain major catastrophic events occur which

would result in the inability to maintain Electric and/or Water/Sewer service for an

extended period of time. This would result in significant cost to rebuild our infrastructure,

as well as negatively impacting our reputations

194

Risks

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47


Cooling Water Intake

Structures 316(b) • Electric System

• The EPA promulgated a revised rule for cooling water systems at power plants. The rule

is intended to reduce the environmental impact of cooling systems on aquatic life. The

new rule may require a modified water intake structure and/or cooling tower

upgrades at significant cost to JEA. Regulations impact NGS and Plant Scherer

Spend Management • Spend

Management

• Ineffective Supply Chain Risk Management (SCRM) can result in the potential

disruption of services/supplies that would have a significant negative impact to our

operations/reliability – including sole sources services, as well as increased regulatory,

fiscal or reputational risk. Disruptive events like natural disasters, cyber-attacks and

data breaches are often out of the organization’s control and are becoming more

frequent. SCRM has become even more important as JEA is increasingly entrusting

some of their workflows to third parties, thus losing control of those workflows and have

to trust the third party to do their job well. An effective vendor management process

ensures that the use of third-party products, IT suppliers and service providers does not

result in a potential business disruption, or in any negative impact on business

performance. Effective vendor risk management process includes adequate

screening, data collection, documentation and monitoring of critical suppliers

Physical Security/Terrorism • Compliance

• JEA may be a primary target for an act of terrorism based upon its designation as

critical infrastructure for the City of Jacksonville. The potential types of terrorism include,

but are not limited to, suicide bomber, vehicle borne explosive device, improvised

explosive device, sabotage, or a mass killing event. This risk may result in the

loss/damage to JEA property, injury/death to employees/civilians, and lawsuits

• While JEA has an inherent risk of an act of terrorism occurring that involves its personnel

and property, the numeric financial/reputational risk values are based upon a terrorist

event that caused significant damage to JEA operations

195

Risks

PROJECT SCAMPI

19 74

142

251 183 28

72 72 72

75 121 163

207 120 0

78 106 47


Water Supply

Management/Long Term

Planning

• Water System

• Environmental

• Planning

• Accurate long term planning is becoming increasingly complex due to the inherent difficulty in

predicting the impact of changing variables (e.g., regulatory compliance, demand/growth,

capital requirements, revenues), sustaining current water/reclaimed infrastructure, and meeting

certain provisions of the Consumptive Use Permit (CUP). Specifically, the CUP provisions may

require a significant increase in reclaimed water usage and/or place new, more stringent limits

on JEA’s aquifer withdrawals

• CUP restrictions, most notably the South Grid allocation restrictions which came in effect

beginning Sept 2014, may result in the inability to meet current and future water needs

Weather & Climate Change

Impact Resiliency Efforts

• Electric System

• Water System

• Environmental

• Planning


• Weather patterns and/or short-term or seasonal extreme weather may negatively impact long

term planning and JEA’s financial and reliability performance., as well as negative reputational

impact and decreased customer satisfaction. Impact may include:

• Short Term - unforeseen revenue and budget need fluctuations; increased debt and subsequent

changes to credit ratings ; rate increases; the inability to meet peak demands; decreased

reliability, difficulty meeting seasonal or annual environmental limits, and increased expenses

from severe storms

• *Long Term - longer-term outages and reliability issues; increased difficulty in load forecasting

and planning; as well as the need to protect our infrastructure from the potential impact of

severe climate change (e.g. encroachment from rising river water levels, rising shallow

groundwater, severe storms; temperature variances).

• * The timeframe for significant impact from climate change may be in excess of 20+years

Revenues and Expenses

Management


• Planning

• External economic factors and/or weather conditions may significantly reduce revenues, or JEA

may not properly manage/control expenses. This could require increased reliance on debt to

fund capital projects. Insufficient revenues and inadequately controlled expenses may result in a

reduced credit rating, increased cost of debt, deterioration of the financial and structural health

of the organization, inability to adequately serve our customers, and loss of reputation

Work Environment • All

• JEA’s organizational health scores in the bottom quartile compared to the OHI global database.

When compared to other groups with lower scores, JEA still scores low – including against other

utilities

196

Risks

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